Vallourec Aktie

Good day, and welcome to Vallourec's 2026 First Half Results Presentation hosted by Philippe Guillemot, Chairman of the Board and Chief Executive Officer; and Nathalie Delbreuve, Chief Financial Officer. [Operator Instructions]

And now I'd like to hand the call over to Daniel Thomson, Director of Investor Relations. Please go ahead, sir.

Thank you, Grace. Good morning, ladies and gentlemen, and thank you for joining us for Vallourec's Second Quarter 2026 Results Presentation. I'm Daniel Thomson, Director of Investor Relations at Vallourec. I'm joined today by Vallourec's Chairman and Chief Executive Officer, Philippe Guillemot; and Vallourec's Chief Financial Officer, Nathalie Delbreuve.

Before we begin our presentation, I would like to note that this conference call will be recorded. A replay will be available following the call. You can find the audio webcast on our Investor Relations website. The presentation slides referred to during this call are also available for download here.

Today's call will contain forward-looking statements. Future results may differ materially from statements or projections made on today's call. The forward-looking statements and risk factors that could affect those statements are referenced on Slide 2 of today's presentation. These are also included in our universal registration document filed with the French Financial Markets Regulator, the AMF. This presentation will be followed by a Q&A session.

I'll now turn the call over to Philippe Guillemot.

Thank you, Dan. Welcome, ladies and gentlemen, and thank you for joining us to discuss Vallourec's second quarter 2026 results. You can see today's agenda on Slide 3.

Now let's turn to Slide 5 to discuss our results and outlook. In the second quarter, we delivered a strong performance once again with group EBITDA of USD 190 million, in line with the midpoint of our guidance and at a solid 21.4% margin. Despite sequentially lower volumes in our international business, Tubes profitability remained highly robust at USD 722 per ton, similar to the level in Q1. This highlights the strength and resilience of our business model amidst a complex operating environment in the Middle East. Our cash conversion continued to improve year-on-year with more than 60% of EBITDA converted to cash this quarter. We ended the period with a net cash balance of USD 183 million, the highest level since 2009.

Turning to the outlook. We expect Tubes volumes to increase and EBITDA per ton to decrease sequentially in the third quarter, reflecting a less favorable mix and timing of additional costs related to Middle East shipments to be reimbursed largely in the coming quarters. In Mine & Forest, production sold is expected to be around 1.4 million tonnes. As a result, we expect Q3 EBITDA to range between USD 170 million and USD 210 million with a wider range reflecting the increased uncertainty related to the renewed hostilities in the Strait of Hormuz.

Turning to our markets. In the U.S., higher activity levels and constrained imports due to the existing tariffs and ongoing trade investigations are supporting solid utilization of our assets. Market pricing continues to improve, reflecting favorable OCTG fundamentals with inventory levels across the board now below the 5-year average. In international markets, our primary customers in the Middle East are leveraging local supply chains such as ours to accelerate their activity. At the same time, select customers who are more directly affected by disruptions in the Strait of Hormuz continue to defer deliveries as they await greater operational visibility.

Global tendering activity remains high, and we see customers moving ahead with project development, notably in offshore markets. We announced several important high-value contract awards in this domain over the quarter, including the largest line pipe contract in Vallourec history for ExxonMobil Guyana's Deepwater, Hammerhead, and Longtail projects. These and other recent bookings underpin higher invoicing from late 2026 with more contract announcements to come in the second semester this year.

Turning to capital allocation. With the announcement of EUR 2.05 per share interim extraordinary dividend to be paid in August and the completion of EUR 110 million in share repurchases in H1 2026, we are cementing our position as one of the most shareholder-friendly companies both in our peer group and the wider market. After quarter end, we were pleased to announce a final agreement with our partners for the exit of our 20% stake in HKM.

In New Energies, our Deep Dive presentation hosted in June highlighted Vallourec's advantaged position as a key enabler in the rapidly growing geothermal market where demand for premium tubular solutions continues to increase. We believe this market could reach a scale comparable to the seamless OCTG market of South America or Africa by 2030, while in the [ meantime ] geothermal customer demand over the next 6 months is expected to exceed the prior 12 months total.

Finally, to support our customers' growing pipeline of offshore deep and ultra-deepwater development, Vallourec is investing in advanced coating and thermal insulation technology that are increasingly critical to flow assurance and project economics. I will discuss our advanced coating solutions offering later in the presentation.

Let's move to the market environment on Slide 7. In international markets, drilling activity was stable outside the Middle East in the second quarter with an uptick in June. In the Middle East, offshore activity rebounded from the low point in March back to pre-war levels, while onshore activity remained lower, primarily driven by countries with limited export routes outside the Strait of Hormuz. Market pricing continued to increase during the same quarter, compensating for increased costs associated with the disruption in the Middle East.

Turning to Slide 8 for a closer look at the Middle East. You can see on the chart on the left that drilling activity in Saudi Arabia continues to accelerate, while activity in the UAE mostly recovered to pre-war levels by June. As a reminder, these 2 countries account for around 2/3 of drilling activity and Vallourec volumes in the region. Meanwhile, activity in other Middle East countries remains almost 30% or 60 rigs below February's level with Iraq most impacted today. While there is considerable uncertainty in the near term around the timing of a full reopening of the Strait of Hormuz, we continue to expect a region-wide rebound in drilling activity as countries seek to maximize their domestic production capacity.

We already see strong appetite from both NOCs and IOCs to collaborate to achieve higher production levels in the coming years with a few projects to bypass the Strait of Hormuz already underway. This activity rebound, combined with much needed restocking of tubulars will drive higher OCTG demand over the coming quarter.

Turning to Slide 9. We can see the latest data from Rystad, pointing to a significant increase in major project approvals or final investment decisions in the remainder of 2026 to 2028 in both onshore and offshore markets, some of which have already been approved since the publishing of this report. As energy security and diversity of supply becomes a top priority amongst nations, we are seeing our customers progressing the development of their project portfolios with increased urgency.

These projects are expected to drive a multiyear increase in global upstream CapEx through 2030 with a growing share of offshore and unconventional projects in the oil and gas supply stack, both of which exhibit higher decline rates than conventional onshore developments. We believe this trend plays to our strength, increasing both OCTG demand and the need for premium tubular solutions in deeper, higher pressure and unconventional developments.

Let's turn to Slide 10 to discuss how Vallourec is increasingly well positioned to capture this growth in offshore and deepwater in the coming years. To address the growing pipeline of offshore deepwater projects in our customers' portfolio, Vallourec acquired and successfully integrated Thermotite do Brasil last year. Since then, we have seen many commercial successes driving high utilization of this line pipe coating asset.

In May this year, we announced breakthrough contracts from ExxonMobil Guyana under our long-term agreement signed in 2021. Under this contract, Vallourec will deliver more than 40,000 tonnes of line pipe, of which 22,000 tonnes will be insulated with Exxon's Proxxima resin systems with Goldilocks subsea insulation technology. This represents Vallourec's largest ever line pipe contract.

Vallourec has become the first licensee of these technologies by ExxonMobil, and we are investing in an upgrade of our line pipe coating assets in Serra, Brazil. Other commercial successes enabled by our advanced coating expertise and integrated offering include a major contract for Azule Energy's PAJ development offshore Angola, involving one of the thickest thermal insulation systems ever implemented in the subsea industry. Further, we announced last week a large contract by Allseas for the Atapu-2 project offshore in Brazil.

In the chart on the right, you can see that after a temporary lower period over 2024 to 2026, the line pipe market is expected to accelerate from 2027 again. Importantly, the percentage of this market requiring thermal insulation coating is also seen increasing with up to 45% of offshore projects worldwide expected to incorporate thermal insulation coating. As you can see from the chart, our manufacturing base in Brazil is ideally positioned to service the largest offshore market requiring this technology.

Moving to the North America market on Slide 11. On the demand front, drilling activity has begun to respond to higher prices with the U.S. rig increasing by around 7% versus pre-war levels. The increase in activity combined with restrained import volumes, which I will cover on the next slide, is driving a reduction in OCTG inventories across the board, which are declining below the 5-year average. As a result, OCTG pricing continues to increase, reflecting favorable supply-demand dynamics, which we expect to continue based on the strength of our recent bookings.

Turning to imports on Slide 12. On the left chart, you can see that OCTG imports remain well below the 2025 level despite higher prices with seamless imports accounting for less than 10% of total shipments in the U.S. We expect the investigation into alleged unfair trade practices from Austria, the largest single source of seamless imports as well as Taiwan and UAE to continue driving greater market share for local producers such as Vallourec. We will see the benefit of higher prices in our P&L from the third quarter and more so in the fourth quarter. Overall, we see an increasingly positive oil and gas market ahead in the U.S. complemented by rapidly growing demand from geothermal customers.

I will now hand the call over to Nathalie to comment on our financial results.

Thank you, Philippe. I will now walk you through our Q2 2026 results. In the second quarter, activity in the United States remained strong, while the continued closure of the Strait of Hormuz affected delivery timing in certain Middle Eastern markets. This led to volumes declining sequentially. But despite these temporary headwinds, we continued to deliver resilient margins, strong cash generation and further balance sheet strengthening.

Let's look now at the figures. I will start with Slide 14. Group EBITDA remained strong at 21.4% in Q2 2026 despite the lower sequential volumes. This highlights both the resilience of our business model and our ability to adapt our cost base to changing market conditions. Net working capital stood at 85 days in Q2, broadly stable compared to Q1.

Total cash generation before shareholder return remained robust at $118 million during the quarter. At the end of June, our net cash is positive at $183 million after a share buyback cash out of $14 million in Q2 and $121 million in the complete first semester. As a reminder, after the end of the quarter in July, we received EUR 307 million of proceeds as a result of the exercise of warrants, which will be reflected in our Q3 cash flow, along with the payment of an interim extraordinary dividend of EUR 2.05.

Turning to Slide 15. Group revenues amounted to $886 million in Q2 2026. The sequential decrease versus Q1 primarily reflects lower shipments to the Middle East as deliveries were affected by the logistic constraints linked to the Strait of Hormuz continued closure. Despite lower revenues, EBITDA remains robust at $190 million, in line with our midpoint guidance. The year-over-year decline in EBITDA is mostly explained by the absence of $16 million contribution from Serimax following its disposal in Q2 2025.

Adjusted free cash flow totaled $125 million in the quarter, demonstrating continued strong cash conversion and disciplined capital allocation. As a result, we further strengthened our balance sheet, ending the quarter with a net cash position of $183 million to be compared to $67 million at the end of Q1, while returning [ $40 million ] to shareholders through share buybacks during the quarter.

Turning to Slide 16. Tubes volumes sold amounted to 244,000 tonnes in Q2, declining sequentially in our international business. Average selling prices remained at strong levels, reaching $3,327 per tonne in the quarter compared to $2,978 per tonne in Q2 2025. This performance continued to be supported by a favorable product mix. Tubes revenue totaled $811 million in Q2 2026. From a geographical perspective, North America remains our largest market and accounted for 47% of revenues, stable year-over-year. The Middle East represented 22% of revenues, up from 18% in Q2 2025. On a sequential basis, however, Middle East revenues declined by 29%, reflecting the temporary shipment delay we already commented.

Now moving to Tubes profitability on Slide 17. Tubes EBITDA amounted to $176 million in Q2 2026, 9% higher than in Q2 2025. EBITDA margin remained high at 22% and EBITDA per tonne reached $722, very close to the strong level already achieved in Q1. This strong performance shows the resilience of our business model with an effective cost management and a positive product and customer mix.

Turning to Slide 18. Mine production sold amounted to approximately 1.2 million tonnes in Q2 2026 compared with 1.3 million tonnes in the previous quarter. The decline primarily reflects higher international freight rates, which affected the competitiveness of iron ore exports from Brazil for our customers and weighed on sales volume during the quarter. Segment revenues totaled $92 million. EBITDA amounted to $33 million, representing a margin of 36% compared to 40% in Q1. The decrease mainly reflects lower sales volumes and unfavorable foreign exchange effects and also some additional costs. As a reminder, the mine is currently in a transition period with Phase 2 expansion expected to come online during 2027.

On Slide 19, in Q2, net income group share was $45 million, that is 5% of total revenue. From EBITDA to net income, we can see depreciation and amortization, very much in line with previous quarters and Q1 2026. Financial results as well at minus $15 million, very much in line with the expected group quarterly run rate that is between USD 17 million to USD 23 million. And the other pillar of the bridge includes, as usual, restructuring and some one-off impacts.

Turning to Slide 20. Cash generation remained strong in the second quarter with total cash generation reaching $118 million. We continue to generate cash from working capital with a release of $39 million, reflecting disciplined inventory management and solid collections from customers. CapEx were $50 million in Q2 and $108 million for the first semester, fully in line with our investment range that is between $170 million to [ $270 million. ]

And moving to Slide 21, you can see that our financial position remains very strong. At quarter end, we held a net cash position of $183 million and total liquidity exceeded $2 billion.

I will now hand the call back to Philippe.

Thank you, Nathalie. Let's turn to Slide 23 to discuss our outlook. Starting with our Tubes business. In the third quarter, we expect volumes to increase and EBITDA per tonne to decrease sequentially, reflecting a less favorable mix and increased cost due to the geopolitical situation in the Middle East to be reimbursed largely in coming quarters.

For H2, we expect volumes and prices in North America to increase compared to H1 2026 reflecting positive OCTG supply-dynamics. International volumes are expected to increase in H2 2026 versus H1 2026 despite continued closure of the Strait of Hormuz which is affecting delivery timing in select countries. EBITDA per tonne in international Tubes is expected to decline in H2 2026 versus H1 2026, primarily due to mix effect and additional costs related to Middle East shipments.

For Mine & Forest, we expect production sold to be around 1.4 million tonnes in the third quarter. We now expect full year production sold to be between 5 million to 5.5 million tonnes, reflecting slightly softer demand from China driven by higher freight costs. At the group level, we expect our third quarter EBITDA to range between USD 170 million and USD 210 million.

Let's conclude on Slide 24. We are delivering best-in-class margins and driving improved cash conversion through operational excellence and cost management. Our customers in the U.S. are increasing activity in both oil and gas and geothermal with recent trade investigations driving strong domestic utilization and OCTG inventories on the ground declining. Strong forecast growth in upstream project approval, particularly in offshore markets are driving improvement in our international bookings, setting the stage for future profitable growth.

Thank you again for your attention. Nathalie and I are now ready to take your questions.

[Operator Instructions] I will now leave the floor to Guilherme Levy from Morgan Stanley.

I have 2, please. First, could you just remind us how much of additional costs you are having to incur now on the back of the Strait of Hormuz disruption? Some other players that have had to ship materials through the Strait over the past few months have pointed out to a learning curve on how to manage costs during this crisis. So I was wondering how that's playing out in the case of Vallourec.

And then secondly, in terms of reimbursement, what's the mood at the moment in terms of conversations with clients? How long do you expect these conversations to take? And do we -- are we talking here about the full reimbursement or a partial one?

Okay. Thank you for your question. I will hand over to Nathalie to answer your 2 questions.

Thank you, Guilherme for the question. So in fact, if you remember, we had guided -- we had expected our EBITDA per tonne in Q2 to reduce versus Q1 and partially into the Strait of Hormuz additional cost. In fact, what we see now is that part of the extra costs have shifted to Q3. And we do not see any ease in the additional costs that I will comment. In fact, we have seen energy, freight and insurance costs being up since the conflict and it's still very much inflated.

So in terms of learning curve, I think we are indeed succeeding to deliver our customers. We illustrated the routes that we are taking in our previous calls. But in terms of inflation of the cost, they are still here. And then as we said, yes, we are discussing customer by customer in order to pass through everything or part of this extra cost. There is still a lag between us incurring the cost and the recovery in this partial recovery on cost that we expect more in the coming quarters and partially as well in 2027.

I would add to Nathalie's answer. First, as we tell you, we expect our Q3 volume to increase even under the scenario that Strait of Hormuz remain closed, which means that we have found ways to get alternative routes to deliver to our customers. And second, as you can imagine, with what happened, inventory on the ground in Middle East are at a very low point. So customers are very eager to get pipes and the discussion on the extra costs are going very well.

We now have a question from Kevin Roger from Kepler Cheuvreux.

Just a kind of follow-up on the Middle East. Just trying to understand the volumes impact and tell me if I'm wrong, but I think the, let's say, volumes impact in Q1 due to the Middle East was something like close to 20,000 tonnes. We have another decline sequentially in the volumes this quarter. Is it fair to assume that the volumes decline that we have seen in Q2 versus Q1 is all about the Middle East and the impact of the Strait of Hormuz closure, et cetera, just to understand a bit -- the volumes impact that you have seen in Q1 and Q2?

And the second one relates to the U.S. So you clearly positively highlight the positive pricing dynamic in the U.S. with the $200 per tonne price effect July versus beginning of the year. What's the, if I can say, net effect of increasing cost inflation, et cetera, that is directly impacting your P&L, please?

On the volume, it takes longer, more time to deliver pipes. So as a consequence, delivery is obviously drifting forward, which obviously, as a consequence, lead to delay reporting invoicing, because invoicing is directly linked to delivery. So exactly, it's just a shift of delivery, which translate in shift of invoicing and as a consequence, shift of EBITDA recognition. So -- and that's why -- and given what's going on and the fact that we need to be very agile and route -- we are creating new routes that didn't exist before the war to deliver to our customers.

All this, obviously, it's always hard to predict. Sometimes a week make a difference. If it's at the end of the quarter or the next quarter, it makes a difference on our numbers. That's why there is uncertainty. But overall, we have had no cancellation of orders, no cancellation of orders, just postponement of delivery, as I said earlier. In the U.S., yes, prices are, as you can see on the chart, increasing and obviously, more than covering for increase of cost which are not, by the way, material in the U.S., scrap price has not increased much and energy costs, you know how well they are, especially gas. And so far, I think we don't see any major impact on our cost.

We now have a question from Paul Redman from BNP Paribas.

My first question is just on, do you expect to generate any margin on the cost recovery of the additional costs you're seeing in the Middle East? And then in terms of the additional cost, do you mind being a little bit more granular on 2 things really. Firstly, do you mind going country by country in the Middle East kind of where you're seeing the greater issues, the greater costs? And then you highlighted energy, freight and instrument costs up, which of those are you most exposed to?

Do we expect to make margin charging back to customers more than we incurred? No, it's not the way we do business. At the heart of our success with our customers is trust. And we are here to do -- to be fair with our customers. And just covering for the cost will be already -- yes, is what we are looking for. And it varies from customers to customers. I will not give you any breakdown, but you can easily guess that increased cost to deliver to Aramco is less because there is a highly localized setup with Aramco as the opposite ADNOC, there is more extra cost because pipes are coming from outside UAE and require obviously more extra cost on the logistic. And same, by the way, for Iraq, if you take Iraq as an example. Okay. And the last question.

On the cost, just to be a bit more granular maybe in the nature of cost. So it's mainly transportation, but we also have additional storage costs because we do have intermediate storage due to the longer route when you need to offload and then truck longer. So these are the 2 main drivers. And for the countries, you had the comment from Philippe.

We now have a question from Jamie Franklin from Jefferies.

So firstly, just on volumes. Obviously, you're tracking quite a bit lower year-on-year. But you're guiding both higher volumes in the U.S. and internationally. And in the U.S., we do have a bit of a tailwind of activity. So just wondering if you see any scenario here where your 2026 volumes can sort of still reach similar level to 2025 or at least approaching that kind of 1.2 million tonne level?

And then secondly, just wondering if you could help us to understand the mix effects that you speak to in your comments on the 2H international EBITDA per tonne. Is that more a 3Q impact than 4Q? Because I would have expected 4Q to benefit somewhat from the new Petrobras LTA.

Okay. Well, as far as the group volume are concerned, yes, we may expect similar volumes in '25, maybe, again, all this depends on how the -- we expect H2 volume higher than H1. It's true that H2 volume were low, but on the back of order bookings of H2 last year, which we knew were lower. All this due to the sequence of the bidding process of our customers. It's not linear over the year. What I can tell you is that tendering activity is fairly active these days for the reasons we explained earlier.

There is even sometimes a sense of urgency to tender project because as we commented, most nations are looking to diversify their source of supply, and obviously look at project out of Middle East to compensate for the millions of barrel of oil, which are not transiting through the Strait of Hormuz. That's why as far as the years to come are concerned, we are rather confident in the fact that there will be an uptick in volume.

Let's talk about offshore. In offshore, we already booked in 6 months what we expected to book in 12. And these are long lead each projects which take longer to turn into revenue, but they will turn into revenue in '27 and '28. So that's I think the part of the cycle we are in.

And for your question on the mix, if I can give you a bit more color. So the comment was, yes, more for Q3. We have -- you have seen in the past that our EBITDA pattern can vary from quarter-to-quarter due to customer and product mix and especially depending on how much services we do have in the product mix. And here in Q3, we do expect slightly less services. If you think of the Middle East, the inventory level now currently in the region is very low and services are linked to the inventory level. So we do have an effect here.

[Operator Instructions] We now have a question from Baptiste Lebacq from ODDO BHF.

Two questions from my side. The first one is regarding your, let's say, setup for deliveries in Saudi. Is it through Bab-el-Mandeb or through Oman? And the second question is related to the cash flow dynamic for Q3 due to the fact that there is still some, let's say, low deliveries in Middle East plus maybe acceleration in the U.S. Can we expect some tension on the working cap side?

Saudi, maybe you don't -- let me explain the setup in Saudi. Pipes are produced locally. So in fact, delays are coming from Oman can be transferred by route to Saudi. Saudi, AMTPJ, JESCO are making the pipe, and we heat treat them and we thread them. So there is no flow going through Strait of Hormuz or Red Sea to make these pipes and deliver them to Aramco. So that's why that's the region which is the least impacted, by the way, from a supply standpoint by the closure of the Strait of Hormuz.

As far as working cap is concerned, as you know, and we have -- I think there is a slide in Nathalie's presentation showing how we have significantly improved our working cap expressed in days of sales, and we continue to be very, very disciplined. And obviously, the levels where we are is a level where we want to step. So obviously, working cap at some point may reflect increase in volume. But for the time being, I think in days, we intend to remain where we are. And I remind you, it is one of the KPIs indexing the short-term bonus of the management.

We now have a question from Paul Redman from BNP Paribas.

If I could ask another couple, I'd appreciate it. The first is just on, can you just explain or just be really clear, is there any shipments that need to go through the Strait of Hormuz over the next 6 months? Or can you do everything by truck?

And then secondly, just to come back to your comment on Saudi. You may not have any issues getting the Tubes because it's domestically supplied. What about getting the steel into Saudi? Or however the supply chain works before it comes to you guys, how does that work? Is there any risk on that side?

As I said, the billets are coming from Oman. So if you look at the map, there is a way to convey by truck these billets to Saudi. So no issue with the Strait of Hormuz. They are obviously extra costs that are paid by Aramco to our suppliers of green pipes. Then as I told you, our volume in Q3, and I would say in general in H2 in Middle East will increase whether or not the Strait of Hormuz remain closed, which means that all our alternative routes are today in place and will be used to deliver our customers, which leads to extra costs, which are, as we said earlier, negotiated with our customers to be reimbursed in the quarters to come.

[Operator Instructions]

So if there is no more questions. Thank you.

We do have a question. We have Kevin Roger from Kepler Cheuvreux. So I'll leave the floor to him.

Kevin, what's your question? No question.

Okay. Maybe Kevin, is your mic on?

Can you hear me?

Yes, we can hear you.

Yes, we can.

Yes. Sorry for that. It seems that there was an issue with the line. Very sorry. And a final one and probably you will, let's say, avoid to answer the question, but I have to. Just maybe if you can, let's say, pre-guide on the Q4 improvement that you forecast on the EBITDA, any kind of magnitude that if the situation remains like it is today in the Middle East, the kind of sequential improvement that we should expect Q4 versus Q3, please?

I won't answer your question, even though I just confirmed volume should increase in H2 versus H1 and whether or not the Strait of Hormuz reopen, okay?

Well, anyway, thank you very much. Thank you all. While uncertainty around the situation in the Middle East persist, I'm confident that our business can adapt rapidly and take advantage of the improving medium-term outlook we see ahead. Looking ahead, we are encouraged by our customers' plan to restore production capacity in the Middle East and by nation's effort to diversify their oil and gas supply in response to the recent disruption affecting the Strait of Hormuz.

Activity in the U.S. continues to build with strong OCTG fundamentals driving volume and price upside. Recent high tendering activity in offshore and deepwater market is translating into strong momentum in our offshore bookings, underpinning profitable growth from 2027. In New Energies, our past efforts are translating to increasingly significant sales volumes with a high growth trajectory.

Supported by our From Good to Great Plan operational excellence initiatives, differentiated and innovative product offering and ideally-located manufacturing centers, Vallourec is well positioned to deliver sustainable value creation.

Good day, and welcome to Vallourec's Geothermal Deep Dive presentation. [Operator Instructions] And now I'd like to hand the call over to Daniel Thomson, Director of Investor Relations. Please go ahead, Daniel.

Thank you, Laura. Good afternoon, ladies and gentlemen, and thank you for joining us for today's deep dive presentation on the geothermal market. I'm Daniel Thomson, Director of Investor Relations at Vallourec. I'm joined today by Vallourec's Chairman and Chief Executive Officer, Philippe Guillemot, Vallourec's Senior Vice President for New Energies, Project Line Pipe and Process, Bertrand de Rotalier our Technical Director of Marketing and Business Development for New Energies, Nora Brahmi; and Joe Hill, Vice President of North America New Energies Business Development.

Before we begin our presentation, I would like to note that this conference call will be recorded. A replay will be available following the call. You can find the audio webcast on our Investor Relations website. The presentation slides referred to during the call are also available for download here.

Today's call will contain forward-looking statements. Future results may differ materially from statements or projections made on today's call. The forward-looking statements and risk factors that could affect those statements are referenced on Slide 2 of today's presentation.

These are also included in our universal registration document filed with the French Financial Markets regulator, the AMF. Presentation will be followed by a Q&A session where today's speakers will also be joined by members of Vallourec's senior leadership team, including Bertrand Frischmann, Chief Operations Officer; and Jacky Massaglia, Senior Vice President of North America. I will now turn the call over to Philippe Guillemot.

Thank you, Dan. Welcome, ladies and gentlemen, and thank you for joining us to learn more about Vallourec's advantaged position in geothermal energy, where we are seeing rapidly growing end markets today with the potential to become a significant part of our profitable growth ambition.

You can see today's agenda on Slide 3. Let's turn to Slide 5. For those of you who are not familiar with Vallourec, we are a world leader in premium tubular solutions for the energy market, both traditional and new with over 13,000 dedicated employees worldwide.

Our pioneering spirit and cutting-edge R&D capability are key enablers in opening new technological frontiers. This includes the development in conventional and next-generation geothermal we will highlight today. While oil and gas remains our largest market today at over 80% of our tubes revenues, a growing part of our research and development and product development efforts are directed towards new energy applications in line with our strategy to lead in innovation.

This strategy, which we initiated in 2022, has been a key success factor in our competitiveness and growth. We have demonstrated its success on 2 occasions already this year in the field of next-generation geothermal where Fervo Energy and XGS placed their trust in Vallourec to support their ambitious project development plans over the coming years.

Turning to our New Energies business on Slide 6. Today, we offer tubular solutions across the geothermal CCUS and hydrogen market. This business complements our oil and gas activities, opening attractive new growth channels to serve growing primary energy demand while lowering our scope 3 emissions downstream.

The pace of growth can vary between end markets in new energies with geothermal leading today. Thanks to this comprehensive portfolio, we are confident in delivering our 2023 Capital Market Day target to contribute at least 10% to 15% of group EBITDA by 2030.

Now let's focus on the momentum behind geothermal on Slide 7. While conventional geothermal energy is not a new concept, next-generation geothermal technologies are quickly becoming competitive, reliable, clean and scalable solutions to serve the world's rapidly growing demand for electricity.

This demand is driven by AI data centers, adoption of electric vehicles and the electrification of industry.

According to the IEA, electricity share of global energy investment is set to reach 60% this year, up from less than 40% a decade ago and keep on rising. With grid develop moving slower than this trend, behind-the-meter solutions like next-generation geothermal are becoming increasingly attractive options for offtakers.

Furthermore, as the ongoing conflict in the Middle East highlights, energy security and sovereignty has moved up the policy agenda of nations with domestic primary energy sources gaining in value. Most importantly, technological advances in next-generation geothermal techniques and materials, including tubulars have removed constraints facing conventional geothermal. This unlocks major resource scale and further cost reduction with our fit-for-purpose asset footprint close to our customers in key geothermal markets and our advanced range of tubular solutions and [ engineering ] expertise, we are well positioned to benefit from the structural demand trend in power and geothermal markets today and in the coming years.

Let's turn to Slide 8 to put some figures around the momentum in the market. We believe geothermal is at a true inflection point where resource potential, demand, capital and technology are all converging. First, the resource base is extraordinary. IEA state that technically feasible enhanced geothermal resources within 8 kilometers drilling depth could meet global annual electricity demand 150x over.

Second, geothermal is uniquely positioned to support structural electricity demand growth. In the U.S. enhanced geothermal could meet up to 64% of forecast electricity demand growth by hyperscale data centers by the early 2030. Third, we are already seeing commercial traction. With 1.6 gigawatts of geothermal power purchase agreement signed in the U.S. over the past few years, confirming accelerating adoption.

Fourth, capital is flowing into the space with approximately $8 billion raised since 2022 to develop next-generation geothermal solutions. And finally, the economics are improving rapidly. Drilling cost per foot have declined by approximately 70% since 2022, significantly enhancing project viability and scalability.

Importantly, there is room for further improvement in drilling costs as the industry leverages learning from the shale patch. With that, I will hand the call over to Bertrand de Rotalier, Senior Vice President, New Energies, Project Pipe and Process and his team to highlight the opportunity in greater detail.

Thank you, Philippe, and good afternoon, ladies and gentlemen. On Slide 10, you can see an overview of the main geothermal development concepts. On the left side, you have conventional geothermal, which makes up the vast majority of today's projects. This major technology relies on 3 subsurface elements.

First, a source of heat from the earth's core such as rock second, a permeable formation or reservoir, allowing the containment and flow of fluid and third, the presence of water or steam to transfer heat from the reservoir to the surface. Once brought to the surface through the drilling and casing of production wells this water or steam at temperatures of 60 to 300 degrees Celsius can be used to drive a turbine for electricity generation or passed through a heat exchanger for district heating.

Today around 85% to 90% of geothermal capacity installed is used for district heating, while 10% to 15% of 17 gigawatts is used in electricity production worldwide. More recently, geothermal techniques have been harnessed for direct lithium extraction in tandem with electricity production of district heating. This improves geothermal project economics, but it remains for now, at an early stage of development.

Now moving to the right side of the slide. You have 2 emerging next technologies. These are enhanced geothermal systems or EGS and advanced geothermal system or AGS, also known as closed-loop geothermal. By eliminating the need for one or more of the 3 key subsurface elements mentioned earlier, these technologies offer a much larger potential for deployment globally.

In enhanced geothermal systems, operators use horizontal drilling and fracking technology adapted from the oil and gas industry to create a man-made underground reservoir. This allows surface water to be injected into formation of hot rock and brought back to the surface through production wells.

In AGS the requirements of natural permeable reservoir water is therefore nullified. In advanced geothermal, seen on the far right of the slide, fluid is injected, heated underground and returned to the surface in a completely closed structures. There is no direct contact of the circulating fluid with the surrounding rock.

In AGS, the need for large quantities of surface water is eliminated as the fluid is recycled continuously. Risk of induced seismicity is also minimized with AGS. These next-generation technologies typically target deeper formations with hotter rocks compared to conventional geothermal requiring more complex well designs. This drives higher technical requirements for premium bespoke tubular products and connections.

Turning to Slide 11. By removing the constraints of conventional geothermal, which has limited so far the deployment and financing of projects, next-generation technologies are making geothermal location independent. This is demonstrated on the slide, which shows an assessment by Project InnerSpace of the geothermal potential energy, which can be unlocked through enhanced systems at depth of 2,000 meters on the left and at 7,000 meters on the right, virtually everywhere.

Regionally, the United States is assessed to have the world's largest technically feasible enhanced geothermal capacity with about 1/5 of the global total. Even at the depth of 5 kilometers, U.S. technical potential is over 7 terawatts, 7x more than the country's total installed electricity capacity today.

Turning to Slide 12. You can see why this resource is so compelling relative to fossil fuels and other renewables. Aside from being essentially unlimited, geothermal energy is always available. On average, a geothermal power plant will produce energy for around 8,600 hours a year, while in solar plants, the average is around 2,000 hours per year.

This high capacity factor is essential for hyperscalers in particular, who demand clean base load behind the meter electricity for the efficient operation of data centers. Unlike wind and solar, geothermal power plants only require modest amount of space. Regardless of whether it is a domestic system or large-scale plant, most of the infrastructure is buried underground.

Geothermal technologies are based on proven oil and gas technologies with high transferability of skills. The plants are long-lasting, safe and reliable with very long average life spans of 30 to 50 years. Geothermal enjoys bipartisan political support in the U.S. and is seen favorably around the globe. Finally, cost of geothermal are declining rapidly with next generation already cheaper than nuclear and potentially becoming cheaper than gas fitted with carbon capture and storage in as little as 5 years.

Moving to Slide 13 for a closer look at geothermal economics. Using enhanced geothermal data published by Fervo Energy in April this year and data from [indiscernible], we can see that conventional and enhanced geothermal already outcompetes both traditional and SMR nuclear energy in upfront capital costs.

While the first 100 megawatt of Fervo Cape Station project has a relatively high capital cost of $7,000 per kilowatt, the second phase of 400 megawatt under construction today is expected to cost $5,500 per kilowatt, a 20% reduction. Fervo aims to drive costs down to $3,000 per kilowatt in the next 5 to 10 years. That will place enhanced geothermal just above the average cost of building a gas plant with combined cycle turbines and up to 50% below the cost of natural gas-fired power plants fitted with carbon capture and storage.

Beyond price, next-generation geothermal power can be brought online faster has a higher capacity factor than cheaper renewable sources like wind and solar and does not require connecting to the grid. These factors are equally, if not more important than price from offtakers in the U.S. today.

Moving to Slide 14 to see how we can achieve this ambitious cost reduction. On the left, we can see the typical CapEx breakdown of geothermal power projects with drilling and wells accounting for 30% to 60% of project CapEx, including 10% to 15% on tubes and connections. This high proportion shows the central role that drilling plays in lowering costs.

On the right, you can see that the rapid reduction in days to drill Fervo's enhanced geothermal wells has led to a 70% reduction in drilling cost per foot over 3 years. These improvements are the results of engineering expertise adapted from the oil and gas and applied to geothermal as well as key enabling technology and equipment such as the premium tubulars in connection we provide.

Let's move to Slide 15 to look at the big picture of what these improvements could mean for market adoption of next-generation technologies. As many reports have highlighted recently, electricity consumption is growing rapidly after years of low or no growth. In the U.S., you can see the main drivers are data centers, transportation and industrial electrification, a common thread in many countries. This demand growth is creating a major market opportunity for clean baseload and fast-to-market supply sources like next-generation geothermal energy where off-takers are already paying prime power prices for these benefits.

With repetition and continued efficiency improvement, next-gen geothermal costs are expected to reduce significantly. The IEA estimates that in a low-cost scenario where enhanced geothermal LCOE could be reduced by 80% within 10 years to $50 per megawatt hour, geothermal could meet up to 15% of global electricity demand growth through 2050. . This would require the cost-effective deployment of as much as 800 gigawatts of next-generation geothermal power capacity worldwide producing almost 6,000 terawatt hours per year. To put that in context, it is equivalent to the current electricity demand of the United States and India combined. Clearly, this scale represents a major opportunity for next-generation geothermal and for Vallourec.

Turning to Slide 16. We outlined some of the key players in the geothermal ecosystem today, focusing on hyperscalers, powering the exponential growth of AI and data centers. These hyperscalers are significantly outpacing other industries in clean energy investments with Amazon, Google, Meta, Microsoft together accounting for roughly 80% of corporate renewable power purchase agreement in the U.S. last year according to S&P Global.

Below, we show some of the geothermal developers. The key point to highlight here is that the level of financing for both conventional geothermal power and next generation is also growing exponentially. Next-gen funding has grown from just $22 million in 2018 to more than $3.2 billion so far in 2026. While funding for conventional geothermal power, projects reached nearly $5 billion in 2025, a fourfold decrease from 2018.

Another sign of growing investor confidence in the sector is the increasing share of low-cost debt-based financing accounting for nearly 30% of the total last year. These players value our strong track record, premium product offering, leading R&D capabilities and local asset footprints.

Let's turn to Slide 18 to focus on Vallourec's enabling value proposition. Vallourec has a long history of pioneering innovation and execution in geothermal, making us the partner of choice in enabling new projects and technologies. Our first geothermal projects were executed in Indonesia more than 30 years ago where we maintain local presence today.

In 2022, we launched our dedicated New Energies business line in the context of the new Vallourec plan, quickly leading to significant growth in our customer base, now standing at 16 discrete customers and doubling our sales volumes.

Our group-wide strategy of value over volume is applied consistently in geothermal energy where we address enhanced advanced and some high-end segments of conventional geothermal mainly in the U.S., Europe and Southeast Asia. Our industrial footprint is positioned near our customers, leading to lower costs. You will recognize a few of the names of our customers on the slide.

With that, I will hand over to Nora Brahmi, Marketing and Development Director for New Energies to walk you through the technical requirements of geothermal wells and our premium geothermal offering in more detail.

Thanks, Bertrand, and good afternoon, everyone. Let's turn to Slide 19 to examine the unique physical demands of geothermal wells. Wells are the backbone of geothermal development and are critical to project success. As projects move deeper into hotter formations, particularly in next-gen geothermal, more complex tubes become essential for maintaining well integrity.

Compared to oil and gas wells, geothermal wells operate for longer periods of up to 30 years at higher temperatures of up to 350 degrees Celsius and face more challenges of thermal fatigue. Moving from conventional to next-gen geothermal, additional requirements such as burst resistance and higher torque connections to be able to drill long lateral drains and frac through them add to the complexity of tubular products.

At Vallourec, we have leveraged our extensive oil and gas expertise, along with our best-in-class R&D and testing capabilities to lead the way in designing fit-for-purpose premium tubular products for geothermal applications. I'm now on Slide 20. Our geothermal customers place high value on Vallourec's comprehensive R&D and testing capabilities. These capabilities allow us to demonstrate the suitability of our premium products.

For example, in 2023, we successfully qualified our VAM 21 connections up to 350 degrees Celsius in a new test protocol closer to the application. Earlier this year, we conducted the industry's first physical casing collapse test at elevated temperature, generating long-awaited validated data on tubular performance under real geothermal operating conditions.

These results mark a major milestone for geothermal well design and provide operators with new confidence in material selection for high-temperature environments. Specifically in advanced or closed-loop geothermal, we have integrated our proprietary vacuum insulated tubing solution known as THERMOCASE VIT into AGS pilot projects to demonstrate its suitability.

Going forward, our R&D road map is focused on delivering solutions for even hotter conditions above 350 degree Celsius, improving our existing design to enhance closed-loop economics and economically address the challenges of corrosion. Back to you, Bertrand.

Thank you, Nora. To sum up, Vallourec is not just a supplier in the value chain. We are an industrial partner, enabling our customers to extend beyond today's project limitations. Our premium tubulars for extreme conditions reduces the failure risk, protecting project internal rates of return and allowing bankability.

Our integrated engineering and well-designed expertise is leveraged to optimize costs and performance, leading to lower LCOE. Backed by an industrialized supply chain, strong local execution and deep partnerships with first movers, we enable large-scale deployments without bottlenecks while embedding ourselves in customers' long-term programs and repeat business at the forefront of geothermal development. I will now hand over the call to Joe Hill, VP of North America New Energy's Business Development, to discuss one of our key customers, Fervo Energy. Joe, over to you.

Thanks, Bertrand, and good afternoon to our listeners. Our journey with Fervo began in late 2021 and culminated earlier this year in an exclusive 5-year U.S. supply agreement for premium tubes and VAM connections. This long-term agreement is worth up to $800 million in revenue to Vallourec, the largest New Energies LTA in our company's history and comparable in size to those of our largest international oil and gas customers.

Fervo has big plans. At its IPO in May, the largest ever in the clean energy space, the company outlined a 41 gigawatt pipeline of EGS projects. This comes in addition to its flagship 500-megawatt Cape Station project under construction today in Utah as well as 550 megawatts of mature shovel-ready projects or extensions.

According to broker research, Fervo is targeting 1 gigawatts of EGS capacity online by 2030 and 5 gigawatts by 2035. This would represent over 1 gigawatt more than today's entire fleet of installed geothermal capacity in the U.S. The company is constructing projects in standardized, modular 50-megawatt geoblocks, enabling rapid cost reduction of surface facilities while targeting continued reduction in drilling costs using many of the oil and gas techniques that unlocked the U.S. shale.

So why did Fervo choose Vallourec above others? We engaged early. Our engineering team supported them to optimize their well designs and our R&D capabilities enabled critical material and connection testing under Fervo's protocols. Lastly, and importantly, our fully domestic U.S. supply chain offered improved time lines and costs. We are proud to partner with Fervo in this pioneering of enhanced geothermal technology at scale. Back to you, Bertrand.

Thank you, Joe. Now let's look at how these favorable market translates to value for Vallourec. On Slide 24, we provide typical parameters to translate geothermal power capacity additions down to expected tonnage with an indication on revenue potential and profitability of those tons.

For example, adding 1 gigawatt of power using enhanced geothermal techniques with a yield of 5 megawatts per well would require around 200 wells. At 500 tonnes per well, we would require around 100,000 tonnes of tubulars. As you can see, Vallourec should benefit as the share of the next-generation geothermal technologies in the mix grows.

Here, we generally have a higher opportunity to differentiate, leading to attractive returns that are in line to above our group average. Let's move to Slide 25 to discuss the high market potential we see in the years ahead. Until recently, geothermal volumes have been almost exclusively related to conventional projects, accounting for less than 1% of our group. With the market tailwinds we see today driven by rapidly expanding electricity demand, we expect geothermal to become the largest contributor of our ambition to reach a 10% to 15% EBITDA contribution from our new energies portfolio by 2030.

We display on the right-hand chart, our latest view of Vallourec's addressable geothermal market, which has increased significantly year-over-year on recent commercial success. Here, we exclude regions and end markets that do not meet our strict value over volume requirements with our focus mainly on the U.S., Europe and Southeast Asia.

We assess up to 5x growth in our addressable end markets by 2030 in our high case scenario from less than 80,000 tonnes today. For context, this is equal to the market size for premium seamless tubulars of South America or Africa today. It is worth noting that most of the forecast growth in geothermal power capacity additions lies beyond 2030 with our estimated addressable markets roughly 30% higher year-on-year in 2031.

Our mid-case assumptions reflect the necessary level of conservatism where we apply significant risking to end market projections and our customer drilling plans. In these premium markets, we expect to outperform our market share in oil and gas OCTG. With our base case assumptions for geothermal and the rest of our New Energies portfolio, we are confident in confirming our 2030 ambition to reach 10% to 15% of our EBITDA.

Thank you for listening. I'll turn the call over to Philippe for the conclusion.

Thank you, Bertrand. Let's turn to the conclusion on Slide 26. As we have highlighted today, next-generation geothermal is scaling rapidly with game-changing potential for structural tubular demand. We, at Vallourec have the winning formula, customized premium geothermal tubular products, decades of expertise, experience and a local asset footprint close to our customers. We will approach this major market opportunity with our established value over volume strategy and emphasis on return on invested capital.

Thank you again for your attention. We are now ready to take your questions.

[Operator Instructions] We have a first question from Guillaume Delaby from Bernstein.

Thank you very much for this very interesting presentation. My first question is for Bertrand and Nora. Just to fully understand, for Fervo as of today, given the fact that it is higher temperature than oil and gas and longer useful life, what are you exactly selling to Fervo? Are the products already available? Is it the VAM connection? So I'm a little bit confused. So if you can maybe help me a little bit.

And second question, maybe stupid, and sorry, Philippe, this is for you, this one. Regarding your addressable market size, so let's assume the [indiscernible] the case is reach of more than 350,000 tons. So it means in a blue, blue, blue sky scenario, compare your current volumes that geothermal could represent 20% to 25% of your volumes by 2030?

Okay. So Bertrand, and Nora, I'll let you...

So regarding the first question, so what we are selling, we are selling OCTG, which have been tested under strict protocol defined by Fervo for enhanced geothermal application for their enhanced geothermal application. So maybe, Nora, you can describe a bit more what is the context and what is actually the request on Fervo in term of technical tests compared to traditional oil and gas. But what we do primarily is making sure that our existing technologies are applicable to the context that Fervo is giving us.

Yes. And to complement, so yes, we are talking about VAM connections. As said by Bertrand, we are pushing our OCTG product. And we are also leveraging on the shale application because Fervo is having an application with long drain where you need torque, you need fracking, so you need some internal pressure. So we have also developed some testing protocol to replicate the application to make sure that we have the best VAM product for their application.

Okay. Thank you, Nora. Well, obviously, as you understood for the answer to your first question, it is a market where very few people will be able to play because you need to demonstrate that your product is fit for mission, which starts with obviously developing new test protocols, which don't exist and that we have to invent. And this -- that's what we do today in our research and development center in the north of France that you may have already visited. So we are really in a value over volume strategy where it's really premium technology to be sold.

That's the reason why when you look at the addressable market, even though we consider it's highly technical and we are well positioned, we don't consider we get 100% of this market. So you have to apply a percentage on the total market of 350 kilotons. As Bertrand said, by the way, we expect to have a higher market share than the way we have in OCTG for the reason we just explained earlier.

So even if you apply a 50% market share on the blue sky scenario, you are still on high volume and consistent with our obviously objective to be 10%, 15% or even higher. All this depends, obviously, it's a ratio on what oil and gas market will be in 2030, obviously.

We have now a question from Kevin Roger from Kepler Cheuvreux.

I have a first one that is maybe completely naive. Sorry for that. But you do not talk about the, in a way, legal environment for the permitting, et cetera, for the geothermal. So the first question is, is it difficult in a way to get the permits to make the geothermal activities or it's very simple everywhere? And if there is any difference by region, that will be the first one.

The second one is about the competitive landscape. So if I make, let's say, the rough math based on the number that you provide, you have a kind of 10% market share maybe on the total addressable market today. So who are the big players against you in this geothermal market? Is it the same OCTG guys that we know like Tenaris or you have some specialized player also?

And the third one is just to be sure that I understand correctly. So today, the -- in a way, geothermal makes 1% roughly of your volumes. And if I look at the addressable market, that's going to, let's say, multiply by 5. So let's assume that you keep the same market share that will mean that the geothermal business will make 5% of your volumes and you expect it to make 10% to 15% of the EBITDA. So implicitly, are you assuming that the EBITDA per ton in the geothermal business will be 2x higher than in the oil and gas? Just to be sure that if I'm -- I follow the math.

Bertrand. I hand over to you...

Regarding the permitting, clearly, Kevin, it's an enabler and we see it as part of the central question also to contribute to the acceleration in the future. Why it's starting earlier in the U.S. than in Europe, for example, there are 2 reasons. The first one is that permitting is in the U.S. in Europe. And it's at the heart today of some of the questions to [ accelerate things ] and why it's moving faster in the U.S. it's because, let's say, a lot of things -- several measures were taken in the U.S. to allow simplified permitting for the geothermal projects.

Second question is [ competitiveness ] we said I think there are less players in the market because of the [indiscernible]

Yes. So on the second question, Kevin, clearly, today, in the market we play in, as we said, EGS, AGS, I would say the advanced geothermal world, there are a few players which are capable to play here, and there are less players than on the OCTG. So I mean the one you know are probably -- some of them are probably capable to play on some of those segments. But I would say that in general, there are much less competition than we see on the OCTG market.

I'm going back to the first question, that's the reason why we expect the market share which is higher than we enjoy the OCTG market. So even though the market is increasing by a factor of 5x by 2030, but there is still growth after, by the way, it's mentioned in the presentation-- it's almost exponential when you look at the numbers beyond 2030. So with a higher market share on a significantly increased market, obviously turns into more [indiscernible] value current market in the current addressable market. [indiscernible] consistent with our [indiscernible] between 10% and 15% of our EBITDA [indiscernible] coming from these new energy applications geothermal, hydrogen, and CCUS, with geothermal [indiscernible] definitely taking a very [indiscernible] and a clear acceleration in [indiscernible]. And obviously, we are there to stick to our value over volume strategy.

[Operator Instructions] For now, there are no more questions on the conference call at this time. So I hand the conference back to the speakers for the written question.

Okay. Thank you.

I will take a few questions from the web at this time. So there's a couple around the required capacity for geothermal. So maybe we could give a bit of color around the sort of spare capacity comments that we've made around the oil and gas business in the U.S. and the requirements going forward in the geothermal market.

Yes. As you know, we have spare capacity. As you know, in the U.S., we have 2 rolling mills, one of them for larger diameter, which are the one used today for Fervo. So we have capacity, and we have ways to debottleneck if needed. Obviously, 2 scenarios, it comes on top of oil and gas volume, which at some point may decrease or it comes on top. And in this case, we have to invest to debottleneck. But these are 2 good problems to have anyway because it guarantees that we continue to fully utilize the existing capacity we have. And again, with volume which are not dilutive. And on top, I would add that when you have demand putting in excess of capacity, usually you have a better pricing power, too. So I think -- and at the end, it's only a good news to see that we have a new market opening for our technology today in the U.S.

And then maybe another one on the product mix is one of the key lessons of shale was the ability of the industry to innovate and use more efficient products and better value products. What areas is Vallourec looking at to help the cost curve reduction from here?

Bertrand?

So in terms of products, the product mix, so the shale is moving -- the shale market in the U.S. is moving more and more to high torque solution. I think we already introduced that to shareholders in the past. And we are seeing for enhanced geothermal a very similar trend with a strong interest for high-torque solutions. But I would say that this needs to be applied to the geothermal world.

So Nora explained, so a bit earlier, so higher temperature requirements. So it's a different environment. And the future, probably in the future, we will go for even higher temperature. So this is today on the agenda, for example, for our R&D. So we are talking about 350 degrees, but it might go beyond that in the near term. So that's what we are looking at.

For the AGS, what is important to mention here is that there's a strong interest for a technology that was mentioned by Nora, which is the vacuum insulated tubing that we are one of the very few to have available on the shelf that we are also continuously developing to adapt it further to the geothermal world.

So there are many, let's say -- we are, let's say, using our OCTG existing products, highly premium and adapting them gradually to the geothermal constraints, which we have mentioned earlier and which include clearly a direction for longer laterals, higher temperature, so new constraints in the long term.

Thank you. So maybe another one just to clarify from the web, there's a question saying that we've indicated that new energies will contribute 10% to 15% of group EBITDA by 2030. Should we view this as incremental to the existing OCTG business? Or does it imply a reallocation of capacity away from OCTG?

I would say it depends which assumption you make on oil and gas, but it could be on top of current volume we enjoy already in oil and gas. But again, all this depends on -- it's a ratio at the end of the day. But given what happened recently in the Middle East, I think oil and gas and even more gas than oil have a great future and likely will be leading to a sustained CapEx.

And obviously, this new development may come and likely will come on top. So for us, it's just assurance that existing capacity for sure, will be fully utilized. And all this may lead to CapEx to debottleneck as we do in oil and gas. You've seen the last investment we announced in November in OCTG for the HTO latest generation of HTO connection. So this will be the same approach, I think, for this new market. So we'll see, but it just consolidates the fact that we are able to develop new markets for premium product, nondilutive from a margin standpoint, which can fully utilize existing assets that we may obviously further -- into which we may further invest. But all this is fairly, fairly consistent with our will to improve our return on capital employed.

Another one from the web is around, I think, the replacement market. So do you need to service or replace the tubes in geothermal wells over the lifespan? And how long do the products stay in the well for?

Our clients today are coming with requirements to have a 30-year lifetime. And the project financing is also based on 30 years minimum. So that's actually the specification that we are receiving from the clients.

That's maybe a point we didn't convey well enough, but we are entering in an infrastructure business, which is, by definition, financed by infrastructure financing, which need to be to cover 20, 30 years. And usually, even on infrastructure, you have a first financing. And after a few years, there is a new financing, which needs, yes, at least 20 years runway. So that's why customers like are coming with a 30 years lifetime of their well.

And that's where there are very few people in the world able to do it because you need to demonstrate through very specific test protocols and all the science behind, obviously, what we do that the wells will stand 30 years. So that's maybe something we didn't convey well enough that we are entering in a market where very few people will be able to play. And again, comes with the evidence that they will be able to cope with this challenge of 30-year lifetime, which are mandatory for financing and good financing and project financing.

[Operator Instructions]

Okay. We have another one around the market development in the U.S. asking, are there any more Fervo energies out there? And how mature are the sort of conversations with customers in the U.S. today?

Yes. We communicated earlier on this year-- earlier this year also on MOU we signed also with XGS -- and yes, there are many several credible well-financed geothermal developers, which are moving towards next-generation technologies at scale, whom we are discussing with.

It's a bit premature right now to discuss these customers, but there are several of them who have made already some public announcements around growing actually their next-gen geothermal projects. Last week, there was the World Geothermal Congress in Calgary and several of them mentioned new investments.

I mean, I think that Ormat, for example, mentioned moving forward together with SLB for development of XGS. So we see that gradually, the industry is scaling up. So we, as Vallourec, we are -- our mission is to really very early engage with them at very early project steps. So they -- even before their the proof-of-concept drilling, we start discussing with them to support them on their engineering, on their well design and be there to provide them with their solution adapted actually to their specification and actually to their challenges, their drilling challenges, which is new to the oil and gas and adapted to their very particular challenges.

Thank you. It looks like there's a few questions around clarifying -- I mean an earlier analyst question. So maybe I'll just repeat the one about the market share and what market share we're targeting in geothermal.

Yes. Again, as we said earlier, we expect the market share on that new market higher than the one we enjoy today on OCTG. Obviously, we don't bet that we'll get 100% of it, even though. And as a consequence, obviously, to get more of the market -- addressable market you see on Slide 25.

Again, volume-wise, if you turn this into volume, again, as I said, it's very consistent with our 10% to 15% EBITDA by 2030 coming from these new applications, geothermal having likely the lion's share of this 10% to 15%...

[Operator Instructions] There are no more questions. So I hand the conference back to the speaker for the closing comments.

Thank you. Well, we hope that you have found today's Deep Dive on Geothermal useful and are as excited as we are around the opportunity presented by this value-added market. With our local industrial footprint, leading technology offering and close customer relationships, we are well positioned to drive further value creation. Operator, you may end the call.

[Interpreted] Ladies and gentlemen, dear shareholders, good afternoon. I'd like to welcome you to this 2026 Annual General Meeting. Thank you for being here, and thank you for your continued trust in Vallourec. Joining me today, we have Hera Siu, Chair of the Nomination and Governance Committee and the Remuneration Committee. Nathalie Delbreuve, Chief Financial Officer; and [ Nora Lallauy ], Head of Securities Law and Corporate Governance at Vallourec. [Operator Instructions] The statutory auditors are May Kassis-Morin for Ernst & Young, Mr. Philippe Grandclerc of KPMG have been told to attend the meeting. Maitre Sebastien Chone, Judicial Officer, is also present.

I also invite the 2 members of the meeting who are present and willing representing the largest number of votes taking into account the votes held by the proxies of representing shareholders to form the presiding committee as scrutineers: The Vallourec Action employee share funds represented by Michel Cardon and Ludovic Oster. [ Nora Lallauy ] is appointed as secretary of the meeting by the presiding officer shall remind us of the legal formalities that have been completed to enable this general meeting to be held.

This meeting is being held on first notice. The notices of meeting and convocation were published in accordance with the legal and regulatory provisions in force and individual letters of convocation of notice were sent to each registered shareholder in accordance with the law. All the information documents required by law have been made available to shareholders, including on the company's website within the time frame and in accordance with the procedures laid out by law. These documents include, in particular, the 2025 universal registration document, which is also available under the same terms. I'd like to point out that I have on this desk all the legal documents required for this meeting. They are made available to shareholders here.

As to the agenda of the meeting and the resolution submitted for your approval, I invite you to consult the notice of meeting, which was made available to you at the entrance to the room and is also accessible on our website. Your Board of Directors has not received any request from shareholders to include draft resolutions or new items on the agenda. In addition to the draft text of the resolutions, this booklet contains the reports of the Board of Directors and statutory auditors. You also find on the company's website under the Annual General Meeting section, the presentation for this meeting currently being shown on the screen. This meeting is being broadcast live. The recording of the meeting will be available on the company's website in accordance with the applicable regulations.

Our shareholders have also had the opportunity to use an e-mail address made available specifically for them to submit their questions. Your Board of Directors has not received any written questions from shareholders. I'd like to inform you of the presence of Maitre Sebastien Chone, Judicial Officer, whose role is to verify the proper conduct of the meeting and voting. As to the quorum, the calculation for this GM is based on 229,516,388 shares. The quorum required for deliberations falling within the remit of the Ordinary General Meeting is at least 20% of the total number of the company's share carrying voting rights, i.e., 45,912,278 shares. The quorum required for deliberations falling within the remit of the extraordinary GM is 25% of the total number of the company's shares carrying voting rights, i.e., 57,390,347 shares.

At this stage and based on the attendance sheet drawn up by Uptevia the provisional quorum stands at 77.16%. The meeting is, therefore, duly constituted and may, therefore, validly deliberate on both the ordinary and extraordinary business. The final quorum will be communicated to you before the vote on the proposed resolutions. Final point, it will be no longer possible to sign on the attendance register once the Q&A session begins. Shareholders arriving after the attendance registers closed may attend this meeting, but will no longer be able to vote.

[Interpreted] Thank you, Nora. The meeting is open. After my introduction on the group's strategy and latest news, Nathalie will present the financial results of 2025. I will then outline our capital allocation strategy and ambitions regarding shareholder returns for 2026. Hera, as Chair of the Nomination and Governance Committee and Chair of Remuneration Committee, will present information on the group's governance and the remuneration of corporate officers. The statutory auditors will present the conclusions of their reports, and we will then answer your questions.

Finally, following these discussions, the proposed resolutions will be put to the vote at the meeting.

[Interpreted] Dear shareholders, once again, 2025 was a year of transformation and success. Our performance has been driven by the ongoing commitment of Vallourec's 13,000 employees who I would like to thank for their contribution to the group's success. Thanks to them, we have made progress across all of our strategic priorities. For the third consecutive year, we achieved a leading EBITDA margin of over 20%. We significantly narrowed the profitability gap with our main competitor. And above all, as you saw, we returned to an ambitious dividend policy with the clear aim of being one of the most attractive companies for its shareholders among our peers.

Following the success of the new Vallourec plan launched when I took the helm of the group in 2022, we are now fully committed to our new road map from good to great. While remaining focused on value from good to great reflects our determination to achieve excellence across all our industrial operations and support functions. The ambition is clear, profitable growth. We continue to prioritize value over volume to improve our operational efficiency to invest in innovation and to manage our invested capital rigorously. We're also strengthening our industrial leadership in our traditional markets through targeted investments as we did last November in Youngstown U.S.A.

Finally, we're making progress towards achieving our ambitions in new energy, which is a key area of development for Vallourec. As you can see, Vallourec's momentum is excellent. And following the recovering phase, we're now perfectly positioned to address the energy challenges of today and tomorrow. I'm convinced that the collective commitment of our teams, combined with the renewed confidence of our shareholders, will enable us to maintain this excellent momentum. As you know, the health and safety of our employees is our top priority. It is a prerequisite for everything we do.

In 2025, we continued our path towards excellence and safety. Our rate of accidents with and without lost time per million hours worked fell again last year by more than 35% to 1.25 and working progress towards our 2030 targets. This is the result of the daily commitment of all of our employees. It's also the result of our sustained investment in reducing risks. On the one hand, by training our employees to develop a safety culture and also using protective measures to ensure ever safer working environments. However, behind this undeniable progress, there are unfortunately some unacceptable realities.

In 2025, we regrettably experienced 4 serious accidents that will leave our colleagues with lifelong consequences. These accidents affect us deeply. Our thoughts are with these employees, their families, their loved ones and their colleagues. These tragedies remind us of the importance of our 2030 target. Zero serious accident resulting in lifelong sequelae, an accident frequency rate with and without lost time of 0.2 or less and 0 occupational illnesses. These objectives by 2030, that they rolled out our health and safety road map. This road map has already begun to demonstrate its effectiveness, and we are determined to continue its rollout to lead Vallourec towards excellence in health and safety.

Here, let me remind you of my belief that Vallourec's future also lies in its ambition to set an example in nonfinancial criteria. The group recently confirmed its EcoVadis Platinum rating with an overall score of 86 out of 100, and we are proud to be among the top 1% of companies in terms of CSR maturity, we are, in fact, firmly committed to being a leading player in a decarbonized economy. This is an area in which we've already achieved a recognized level of excellence and where we aim to maintain this lead. Our carbon footprint is 1.45 tons of CO2 per ton of tubes manufactured, which is almost 1/3 lower than the average of our competitors.

To go even further, we're focusing on 3 key levers of decarbonization. Firstly, our industrial footprint with operations in countries that allow us to use almost exclusively low-carbon electricity and the continuation of our efforts in energy efficiency. Secondly, process improvements at the heart of our circularity approach. Over the coming years, we will increase the proportion of recycled scrap in our steel alongside the use of biomass-derived coal in Brazil to replace fossil coke. Thirdly, procurement to develop our capacity to source low-carbon electricity and increase the proportion of recycled steel we purchase. As you can see, year after year, we are maintaining an ambitious decarbonization trajectory, which is bearing fruit and should enable us to remain the leader in our market.

Vallourec's commitment to the environment is not a recent development. It is a long-standing and based on the most stringent standards. Our target for 2025 validated by the SBTi was achieved 3 years ahead of schedule. Our 2030 road map is now based on the Global Steel Climate Council's International standard, the global benchmark for steel decarbonation. As mentioned earlier, Vallourec aims to increase its contribution to a circular economy by continuing to use steel produced from recycled scrap as its primary source. The GSCC standard is currently the only international standard to offer a methodological framework that recognizes the low carbon nature of using scrap. According to the World Steel Association, steel production from scrap emits an average of 0.71 tonnes of CO2 per tonne of steel versus 2.66 tons for steel with a low recycled content produced via blast furnaces, which consequently contribute more to global warming. You will, therefore, easily understand our decarbonation strategy in a choice of the GSCC standard. This standard provides a calculation of the carbon footprint of steel that is representative of Vallourec's industrial activities and takes into account all raw materials. The GSCC standard, therefore, enables us to communicate the complete and accurate carbon footprint of the steel used by Vallourec. We have a transition plan aligned with the Paris Agreement and confirm our targets of a 30% reduction in emissions by 2030.

Our commitment to decarbonization is reflected in a structured plan in 3 areas by 2030 compared to 2021, we're targeting 3 objectives: a 30% reduction in the carbon intensity of our rolled steel, a 30% reduction in the carbon intensity of our finished products and a 25% reduction in our total carbon emissions across our entire value chain. To achieve our targets, we're focusing on 3 key areas: the evolution of our industrial footprint, process improvements and an increase in the purchase of steel made from recycled scrap as well as a low-carbon electricity supply. This trajectory demonstrates our commitment to combining industrial performance with environmental responsibility.

Allow me to briefly review our road map. When I took the helm at Vallourec, the company was on the brink of bankruptcy and had just come out of financial restructuring. In 2022, we launched the new Vallourec plan with strong measures, powerful measures, reorganizing our geographical footprint to move closer to our strategic markets, moving upmarket by prioritizing value over volume, improving our pricing policies and reducing our overheads. On the financial front, after reducing our net debt to 0 by -- at the end of 2024, a year ahead of schedule, we structured our capital structure and significantly reduced our financing costs. We also continued our strategy of rationalizing invested capital with the sale of Serimax completed in 2025 over 4 years. We, therefore, completely reorganized and turn Vallourec around to significantly -- very significantly improve our efficiency and profitability and thus build resilience.

A new chapter is now beginning. And that's the essence of our new road map from good to great, which aims to chart a course focused on profitable, sustainable growth. It's built around key pillars, continuing to prioritize value over volume with strict commercial discipline, strengthening operational excellence, which is also a key pillar of Vallourec's transformation. This requires a collective focus on performance, process improvement and execution discipline continue to expand our development in premium offerings and finally, expand our developments in new energy sectors where Vallourec is well positioned to become a key player.

As you know, we simplified and adapted our industrial footprint to be as close as possible to our customers with an organization now structured around 3 key regions: North America, South America and the Eastern Hemisphere. This organization has enabled the group to become more efficient and agile to bring its operations closer to its customers and to improve its industrial performance. In practical terms, this resulted in '25 in major contracts and greater resilience. This structure positions us ideally to capitalize on developments in the oil and gas market. In an uncertain international context, the recovery in drilling activity is expected to initially result in an increase in short-cycle projects in the U.S.A., followed by support from longer cycle projects from 2027 onwards, particularly offshore.

In this context, our industrial network and our premium solutions are key assets. In the U.S., we offer high torque OCTG connections designed to meet the growing demand for wells with ever longer laterals. Our production there is entirely domestic for unconventional operations. We continue to strengthen our industrial capabilities in this market, notably with a $48 million investment in a new premium threading line in Youngstown, Ohio. In Brazil, our premium solutions can withstand some of the world's most demanding operating conditions. Our positioning enables us to support Petrobras' strategic plan with a long-term agreement signed in 2025 to cover its offshore OCTG requirements until 2030 with a potential turnover figure of $1 billion. Also in Brazil, we finalized the integration of Thermotite do Brasil, our first acquisition in 9 years. This transaction enables us to position ourselves in the market for thermally insulated line pipe solutions for deepwater projects. Finally, in the Eastern Hemisphere, we support our customers on demanding oil and gas projects such as unconventional or deepwater projects through long-term contracts and a comprehensive range of services. As you can see, wherever our customers plan to accelerate their growth, Vallourec is ready to support them.

Let's now turn to our positioning in new energy sources. As energy security concerns play an increasingly important role in decision-making across the globe, we have developed proven technologies that help countries generate and store their own energy. These technologies include solutions for both traditional and next-generation geothermal energy for underground CO2 storage as well as Delphy, a vertical underground storage solution for green hydrogen. In addition to these technologies already available, there are also promising developments in the production of white hydrogen and helium, where we have formed partnerships with key players. With regard to geothermal energy, the strategic agreements signed with XGS at the start of the year and with Fervo Energy last month demonstrate the strength of our positioning. I would like to remind you that the latter represents a potential turnover of up to $800 million over 5 years and equivalent to our largest contracts in the oil and gas sector. This is proof that we are on the right track.

I would like to go back to one of the most significant developments in 2025, the confirmation of a significant and structural improvement of our profitability. As you can see, we have considerably narrowed the margin gap with our main competitor in 2025. I would like also to point out that since then, our Tubes segment posted an EBITDA per ton in the first quarter of 2026 that was higher than that of this competitor for the first time since we launched the new Vallourec plan 4 years ago. At the same time, the optimization of our assets and our discipline in capital allocation are resulting in a first-class return on invested capital, significantly higher than that of our competitor.

With solid fundamentals and a well-established strategic plan, we are approaching 2026 and the years ahead with renewed ambitions centered on 3 key priorities. First of all, to continue and strive for excellence in health and safety and make progress on our ambition decarbonization objective. Secondly, to continue and improve the return on capital through searching for operational excellence while optimizing our assets still. Finally, to keep our commitment to our shareholders by establishing the Vallourec share as a high-yield investment vehicle in the long term.

Before giving the floor to our CFO, I would like to turn quickly to recent developments, the announcement that was made yesterday by ArcelorMittal of the disposal of about 10% of Vallourec's capital. As you could see this in their financial release, this operation is part of the allocation of the capital equities to ArcelorMittal. It shows that our main shareholder naturally benefited from the share price of Vallourec, reflecting the progress that we made recently. After this transaction, ArcelorMittal will keep about 17% of our capital. It will remain our first shareholder as it has been the case since it initially invested in 2024 and will continue to have 1 seat at the Board of Directors. ArcelorMittal has also confirmed its support for the strategy and management team of Vallourec.

With a sound fundamental basis, Vallourec intends to continue the implementation of its strategy, focusing on value versus volume, operational excellence, innovation and targeted investments on key oil and gas markets, especially in geothermal energy, hydrogen storage and carbon capture.

I would like now to discuss the financial elements, giving the floor to Nathalie Delbreuve, our CFO, and I would like to welcome her to this assembly and General Meeting.

[Interpreted] Thank you, Philippe. Hello, everyone. I would like now to move to Slide 15, showing the consolidating financial performance of Vallourec for the 2025 financial year. The group's revenue stood at EUR 3.8 billion, down 6% on the previous year or 1% at constant exchange rates. EBITDA reached EUR 819 million, representing a margin of 21.5%, up from the 20.6% recorded in 2024. Once again, this shows the resilience of our business model. I would like to emphasize that the slight decline in EBITDA from EUR 832 million down to EUR 819 million includes a significant adverse currency impact of EUR 47 million. Net profitable -- profit, sorry, for the group amounted to EUR 355 million, down on the previous year. This change is primarily due to the absence of the one-off gain from the bond refinancing in 2024. We ended the year with a net cash position of EUR 39 million, an improvement of EUR 18 million compared with December 31, 2024. This reflects strong cash generation and includes EUR 370 million paid out to shareholders.

Let's move now to Slide 16, focusing on our Tubes segment. Over the full financial year, sales volumes totaled 1,244 kilotons, a slight decrease compared with the previous year. This reflects a weaker activity in some regions of the world as well as the continuation of our strategy, prioritizing value over volume. Average selling prices remained high at EUR 2,834 per tonne. This once again shows our strategy, which focuses on the high value rather than volume as well as the continued strong demand for premium OCTG solutions.

Let me continue with Slide 17, which covers our Mining and Forestry business. In 2025, sales volumes of iron ore reached 6.2 million tonnes, up 15% year-on-year, while EBITDA stood at EUR 171 million compared with EUR 108 million in 2024. This improvement is mainly due to the successful start-up of Phase 1 of the mine expansion at the end of '24 and to a lesser extent, to a positive noncash impact linked to the periodic revaluation of our forestry assets. The mine remains a major asset and a significant source of cash flow for the group.

Let's continue with Slide 18. As of December 31, 2025, Vallourec's net cash position stood at EUR 39 million, as previously explained. Gross debt stood at EUR 862 million, down from EUR 1.1 billion on December 31, 2024. In September '25, Vallourec announced the partial repurchase of its senior bonds maturing in 2032 for a total amount of USD 82 million, which contributes to the continued optimization of the group's financial structure. As of December 31, 2025, Vallourec's liquidity position was very strong at EUR 1.7 billion, comprising EUR 965 million of cash, EUR 550 million available under a confirmed bank credit facility and EUR 138 million available under another credit facility that is asset-backed.

Slide 19. You can see the positive trend in our credit rating. In 2025, the three main rating agencies upgraded Vallourec's rating to investment grade. The transition from a selective default in 2021 to investment grade 4 years later took place in record time. This exceptional progress shows the success of our strategic transformation, the structural improvement in our margins and the enhanced strength in our balance sheet. This marks a major turning point for the company, resulting in a significant reduction in our long-term cost of capital.

Slide 20, we highlight the key messages from S&P and Moody's and Fitch. All the rating agencies emphasize, first of all, a sustained improvement in margin, a strong cash generation, a more resilient business model. These assessments reinforce our confidence in Vallourec's value creation potential in the long term.

[Interpreted] Thank you, Nathalie. As you see, the 2025 results are once again excellent. We are very pleased with the continued improvement in the group's operational performance and financial health of the company. The first quarter results announced last week are also in line with the trend with first-class margins and cash generation. I would now like to move to our capital allocation strategy and our shareholder return policy for 2026. As last year, let me first draw your attention to this graph, which illustrates Vallourec's transformation path. Since the financial restructuring in 2021, our share price has significantly outperformed the Oil Services Index as well as the SBF 120. Our capital allocation policy is based on striking the right balance between resilience growth and shareholders' returns.

With over EUR 1 billion available cash and a net debt kept around 0.5x our EBITDA, we have built a financial structure that is capable of withstanding economic uncertainties. This financial strength enables us to wisely invest for the future. Each year, we allocate between EUR 150 million and EUR 200 million to our industrial facilities and to rigorously selected projects. In such a context, as I said at the beginning of the meeting, we have invested $48 million in a new premium threading line in Youngstown, Ohio to meet the growing demand for high-torque VAM connections for the U.S. offshore unconventional markets.

Finally, our financial discipline only truly makes sense when it translates into value for you, our shareholders. That's the reason why we committed to distributing between 80% and 100% of our total cash flow with the aim of maintaining an annual dividend supplemented by share buybacks when market conditions permit. This capital allocation policy, combining financial prudence, targeted investments and attractive compensation positions Vallourec as a resilient company capable of creating sustainable value whatever the market conditions. This ambition is reflected in our shareholder return policy for 2026. We, therefore, confirm our intention to return nearly EUR 650 million to our shareholders as announced last week.

Vallourec repurchased approximately 5 million shares during the first quarter for a total amount of EUR 91 million, representing nearly half of the EUR 200 million budget allocated to our buyback program. I would like to emphasize that these amounts -- the amounts that are not used under this buyback program will be included in the exceptional interim dividend paid in August. Of course, this dividend remains subject to the usual conditions of approval as well as the approval of Vallourec's Board of Directors in July 2026. I would also like to point out that the amount of this dividend remains conditional upon the full exercise of Vallourec's outstanding warrants by the expiry date, June 30, 2026, at the latest. As a reminder, the adjusted price of the warrants is EUR 9.21 per share.

To conclude, I would like to highlight 3 key points. First of all, our results. Vallourec once again showed a solid performance in 2025, marked by the payment of the first dividend to shareholders in 10 years about the granting of an investment-grade rating by 3 main rating agencies. Secondly, our nonfinancial leadership. Vallourec is among the leaders in its sector in terms of CSR policies with strong ambitions regarding safety, health and reducing its environmental footprint. Thirdly, with our strategic plan from good to great, we are building profitable growth for Vallourec. This is supported by research and development projects and targeted investments in order to address current and future energy challenges while rewarding our shareholders' trust with an ambitious remuneration policy.

Thank you for your attention. I will now like to invite Hera Siu to present the information regarding the group's governance and the remuneration of corporate officers. But before handing over to her, I would like to welcome her to a new role as Chair of the Nomination and Governance Committee and the Remuneration Committee.

Thank you, Philippe. Good afternoon, everyone. Let me now turn to the composition and governance of the Vallourec Board of Directors. As you can see from the slide, our Board currently comprise 9 members, including 55% women and 45% men, representing 8 nationalities with independence rate of 63%. We also have an observer who is a nonvoting member. Each year, the Board assesses the diversity and skills of its member to ensure they remain aligned with the group's strategy and key challenges. The Vallourec Board of Directors brings together complementary profiles that reflect the group's international footprint and the industrial nature of its business. Directors have senior executive experience and a broad range of expertise covering all key areas. This diversity of profiles and competencies enables effective oversight, high-quality discussions and inform the decision-making at the Board level. The work of the Board of Directors is supported by 4 committees, which play an advisory role and prepare the Board's decision.

First, we have an Audit Committee chaired by Ms. Angela Minas, Lead Independent Director. Second, we have a CSR Committee chaired by Ms. Corine de Bilbao and also Independent Director. We have a Nomination and Governance Committee and a Remuneration Committee, both of which I chair in my capacity as an Independent Director. Few changes happened in 2025 and early '26. On May 22, 2025, the terms of office of Mr. Pierre Vareille and Mr. Patrick Poulin expire at the close of the 2025 AGM, and their renewals was not proposed. At the same time, the co-optation of Mr. Keith J. Howell was ratified, and his term was renewed for 4 years until the 2028 Annual General Meeting. Following Mr. Pierre Vareille's departure, Ms. Angela Minas was appointed as the Lead Independent Director, and I was appointed of both the Nomination and Governance Committee and the Nomination Committee. At the beginning of the 2026, the Board noted the resignation of Mr. Keith J. Howell effective January 21, 2026, and then Mr. David Clarke was co-opted as his replacement and also joined the Nomination and Governance Committee.

Most recently, the composition of our Board has also evolved in line with the changes in the company's shareholding structure. Following the completion of the shareholding transaction announced by ArcelorMittal on May 19, 2026, and in accordance with the provision of the shareholders' agreement dated back in August 4, 2024, the level of representation of ArcelorMittal on the Board has been adjusted to reflect this current change in the shareholdings. In this context, Mr. Genuino Christino has tendered his resignation from his position as Director and Mr. Aditya Mittal has likewise resigned from his role as an observer, both effective May 21, 2026. And the Board of Directors meeting immediately after this AGM will formally acknowledge these resignations.

With respect to the renewal of Genuino's term -- Philippe's term, I would like to highlight that as early as July 2025, the Board on the recommendation of the Nomination and Governance Committee decided to propose its renewal while maintaining the current governance structure, combining the roles of Chairman and the Chief Executive Officer. It is widely recognized that Philippe has been the architect of Vallourec's turnaround and strategic transformation. Over the past 3 years, the implementation of the new Vallourec strategic plan, which Philippe initiated and led has delivered a successful turnaround of the group and restored long and sustainable long-term prospects. Today, Vallourec is deleveraged, financially sound and delivering profitable and sustainable growth across its markets. The group has not only recovered but also deeply transformed and now positioned well as a leading industrial player in the global energy sector. This transformation is a result of a clear strategy focused on value creation rather than volume growth, supported by a strong premium positioning and distinctive innovation capabilities.

Looking ahead, with significant progress has been achieved, the Board considered the full execution of the group's strategy requires continuity in leadership. The road map to 2030 sets very ambitious objectives in terms of industrial excellence, innovation-driven growth and long-term value creation for all stakeholders. In this context, the Board strongly believes that maintaining a unified leadership structure remains appropriate at this stage of the company's development. It enables agile and well-informed decision-making, ensure strong alignment between strategy and execution and preserve strategic momentum. At the same time, this governance model is supported by robust and well-balanced safeguards to ensure this balance of power and strong Board independence. And we have the lead independent director plays a central role in the governance framework, including organizing executive sections without management and engaging directly with shareholders.

The Lead Independent Director is actively involved in our governance roadshows, and this year has spoken directly with a large number of our key investors and proxy advisers to explain the Board's governance. These discussions have provided an opportunity to present the Board's deliberation process involving the Nomination and Governance Committee, the independent directors and the full Board as well as to highlight the effectiveness of the Board's oversight and the constructive and collaborative interaction between the Chairman and CEO and the Board. Overall, the Board considers this governance structure ensures a balanced functioning of the Board, effective counterweight and a transparent dialogue with shareholders and stakeholders. The Board fully acknowledges the relevance of the separation of the roles of the Chairman and CEO, and recognizes the separation is largely regarded as a sound governance practice. However, governance must be assessed in light of the company's specific circumstances and the stage of development. In Vallourec's current context, the Board considers that maintaining a combined role remains the most appropriate structure of the coming term and is fully in line with the company's best interest and those of its stakeholders.

Now we will move on to the 2025 compensation for the President -- for the Chairman and the CEO. In line with the compensation policy approved by the shareholders' meeting in May 2025, Philippe Guillemot, for 2025 consisted of a fixed component and a variable component. First, the annual fixed compensation amounts to EUR 1 million and has remained unchanged since 2022. The annual variable compensation follows a clear structure. It ranges from 0 to 100% of the fixed salary at target and can reach up to 135% in case of overperformance. In 2025, a specific mechanism was reviewed and adopted with an accelerator linked to the group's deleveraging performance. This could increase the variable compensation by an additional 30%, bringing the maximum potential level to 175%. This capped remains in line with the market practice within the SBF 120. Based on the 2025 performance, the variable compensation reached 89% of the fixed salary, approximately EUR 896,000 after the application of the accelerator. No performance shares were granted to the CEO in respect of the 2025 financial year.

Now let me provide more detail on how his performance was achieved. This slide gives you a more detailed breakdown of how the variable compensation was achieved across the different performance criteria. Following feedback we received during the 2025 governance roadshow, the company has further strengthened its transparencies with more detailed disclosure on both the level of achievement of the criteria and also the achieved targets. The annual compensation is based on predefined financial, operational and ESG criteria with a very balanced structure. 60% of each linked to financial performance, 20% to operational performance and the remaining 20% to ESG criteria, including quality, safety, CO2 emission and diversity. Overall, the performance achieved in 2025 resulted in an achievement rate of approximately 89% of the application of the accelerator linked to the group's deleveraging performance. These reflect a level of strong performance overall and with particularly solid results in operational and ESG areas alongside with good financial performance.

Now we turn to the compensation policy applicable to the Chairman and CEO for the 2026 financial year. The overall structure of the CEO's compensation remains unchanged. First, the fixed compensation continues to be reviewed regularly by the Board based on the scope of responsibilities and market benchmarks to make sure that we have strong alignment with companies of comparable size and profile. For 2026, the fixed compensation is maintained at EUR 1 million, again, unchanged since 2022. The annual variable compensation is designed to align the CEO with the group's short-term performance. It is defined each year by the Board based on the recommendation of the Remuneration Committee. It continues to range from 0% to 100% of the fixed salary at target and can reach up to 135% in case of overperformance. Of course, these are based on predefined and demanding objectives.

In addition, the accelerator mechanism is maintained. This allows for an additional increase of up to 30%, depending on the group's adjusted free cash flow this year. As a result, the maximum potential variable compensation can reach up to 175%, which remains aligned with market practices within the SBF 120. The variable compensation is based on the combination of clearly defined financial, operational and safety criteria with a strong emphasis on measurable performance. From 2026 onwards, certain ESG criteria, notably CO2 emission and diversity have been shifted to long-term incentives in order to better reflect their structural and long-term nature, also are in line with market practices. The bonus weight previously dedicated to this criteria has been added to the financial performance criteria, which represents 70% of the overall weighting alongside with other operational and safety.

We can tell safety remains a key priority and continues to be embedded both in the short-term and long-term incentives, ensuring full consistency with the framework applied across the group management. This structure ensures strong alignment between management incentives, shareholders' return and the group's long-term strategic priorities. The proposed grant would represent 220% of the CEO annual fixed compensation based on the fair value of the performance share at grant date, again, in line with market practices. Finally, the CEO would be subject to strict shareholding requirement with an obligation to retain 30% of each grant until his overall shareholding reaches the equivalent of 3x his annual fixed compensation.

Finally, with respect to the other components of the CEO's compensation policy, in particularly those relating to supplementary pension and the noncompete indemnity, these remain unchanged compared to the policy approved by the 2025 AGM. The same applies to the termination indemnity. All these covenants are aligned with the recommendation of the AFEP-MEDEF Code. It is further noted that Philippe does not benefit from an employment contract.

Let me go over the compensation of the directors for the 2025 financial year. This slide, you can see the compensation paid to each director for 2025. The total amount payable in 2025 is EUR 713,500 compared with an overall envelope of EUR 1.25 million. Now we now turn to the compensation policy for the directors for this year 2026. The total annual envelope of the director compensation remains unchanged at EUR 1.25 million. The allocation principle also remains largely unchanged with only one adjustment following the end of the Vice Chair role in May 2025, which has been replaced by the Lead Independent Director. Directors' compensation continues to be closely linked to their participation in Board and committee meetings.

For Board meetings, each session lasting at least 1 hour give rise to a fee of EUR 3,000 for in-person attendance or EUR 1,500 for remote participation. For the lead independent director, these amounts are increased to EUR 15,000 and EUR 7,500, respectively. For committee meetings, the fee amounts to EUR 5,000 for in-person attendance and EUR 2,500 for remote participation with higher amounts for committee chairs. It should be noted that the meeting of Remuneration Committee do not give rise to any compensation. Finally, we do have a physical attendance rule. Remote participation is limited to 40% of scheduled meetings. Beyond this threshold, participation by video conferencing is no longer be compensated, except in specific circumstances.

Now let me briefly cover the rules applicable to the travel allowance and expenses for the Board of Directors. From 2026, the travel allowance is determined based on directors' place of residence rather than the place of departure. This change simplifies and clarifies the framework. Other than this clarification, the policy remains largely unchanged. The travel allowance amount that varies depending on the location of the meetings. EUR 8,000 is granted for intercontinental travel or when meetings are held outside Europe or EUR 2,000 applies to intra-European travel, excluding France. No allowance is paid when the meeting takes place in a director's country of residence or in case of remote participation. Directors are also reimbursed for expenses incurred in the performance of their duties, notably travel and accommodation costs in accordance with the group's policy. Finally, it should be noted that neither did observer nor Mr. Genuino Christino received any compensation prior to their resignation and that Mr. David Clarke have also waived his entitlement to compensation. That concludes my report, Mr. Chairman.

[Interpreted] Thank you, Hera. And now Ms. May Kassis-Morin of Ernst & Young will present the conclusions of this statutory auditor's reports.

[Interpreted] Mr. Chairman, ladies and gentlemen, good afternoon. On behalf of the Board of Statutory Auditors of Vallourec and EY and KPMG, we wish to report to you on our work for the 2025 financial year. We jointly issued several reports included in the documents distributed to you and displayed on the screen. These reports cover the annual accounts of Vallourec S.A., the consolidated financial statements of Vallourec Group, regulated agreements, the sustainability statement, the capital transactions provided for in the resolutions submitted to you or in the Articles of Association.

I propose not to give you the full detailed reading of our reports but to summarize the key points for you. Our reports on your company's annual consolidated accounts are set out on Pages 385 to 388 and 365 to 368 of the universal registration document. Our audit plan and the detailed conclusions of our work were presented to your group's Audit Committee and Board of Directors. The objective of our work in accordance with professional standards was to obtain reasonable assurance that the annual and consolidated financial statements taken as a whole were free from material misstatement.

Our 2 firms carried out work in France and internationally across all significant entities within your group. Our approach and procedures were tailored to your group's various activities to take into account specific characteristics in terms of regulation, risks, organization, internal control systems as well as significant and/or nonrecurring operations or transactions. As part of our work, we paid particular attention to compliance with accounting principles, reviewed the significant estimates made by management and also examined the overall presentation of the accounts and the quality of the financial information. Our reports on the accounts set out the key findings of our audit as well as the procedures we carried out to address them for the annual accounts. This relates to the valuation of equity investments and related receivables of Vallourec tubes.

For the consolidated accounts, we paid special attention to the valuation of goodwill and the intangible and tangible assets of the cash-generating unit, Vallourec South America Tubes. Our reports conclude with unqualified opinions on your group's consolidated financial statements and on the annual financial statements of Vallourec S.A. In the annual accounts, the first time application of ANC Regulation 2022-06, which becomes mandatory from the 2025 financial year, constitutes a change in accounting policy in which we have made a technical observation. We also carried out the specific checks required by professional standards and have no observations to make. Finally, we verified compliance with the presentation of the consolidated financial statements in the European single electronic format, ESEF.

As to our special report on regulated practices, it's on Page 264 of the universal registration document. We inform you that we have not been notified of any unauthorized -- any authorized agreements entered into during the past financial year that would be needed to be submitted for approval by the general meeting. As to the limited assurance report issued by EY on the [ Sustainability ] Statement, it's on Pages 149 to 151 of the universal registration document. It concludes there are no material misstatements in the information provided as a whole with a technical remark relating to the unavailability of certain indicators. It comes with a reasonable assurance report on the selection of indicators. And finally, we issued 2 reports on capital-related transactions. We, therefore, prepared a report on the delegations of authority regarding capital transactions on which you are required to vote on under resolutions 14 to 20 and 20 to 25 submitted for your approval.

The Board of Directors proposes in Resolutions 14 to 20 that to delegate to it the power to decide to issue shares and/or various securities with the maintenance and/or cancellation of preemptive subscription rights for a period of 26 months. In Resolution 22 to authorize it for a period of 14 months to allocate existing or to be issued ordinary shares free of charge. In Resolution 23, 24, to delegate to him the authority to decide an increase in the share capital of your company to issue shares and/or securities with the removal of preemptive subscription rights in favor of members of employee savings schemes set up within a group company for a period of 26 months. And in favor of employees and corporate offices of the company and companies of the Vallourec Group for a period of 18 months.

In Resolution 24, 23, the Board did not -- has not set out in this report, the financial terms under which the issues will be carried out. Consequently, we do not express any opinion on these resolutions or on the proposal to waive preemptive subscription rights, we shall prepare an additional report should your Board of Directors make use of these delegations. We've also prepared a report on the conversion of preference shares carried out in accordance with the Articles of Association who have no comments to make regarding the conversions that have taken place.

Resolution 25, the delegation of proxy to representative with -- in Resolution 25 to dedicate to it the power with the option to subdelegate to among the terms and conditions for exercising the share of subscription warrants. We have carried out the necessary procedures in accordance with the professional standards applicable in France, taking the content of the report provided by the Board of Directors on the considered modifications.

Ladies and gentlemen, shareholders, thank you for your attention. Thank you.

[Interpreted] Thank you, May. We are now able to answer your questions, the shareholders in this room. Before taking the floor, please give us your name and quality.

[Interpreted] We are now ready to take your questions. Are there questions in the room?

[Interpreted] Individual shareholders, I have 3 questions for you. Congratulations, first of all, on the results. Could you confirm that the amount of compensation for 2025 were exceptional dividends paid out and that we are not to expect such a high level for next year, bearing in mind that the dividend paid out at EUR 351 million and that the net result for this year is EUR 377 million. That gives a payout ratio of 94%, a high level and all this bearing in mind that the net result is down EUR 100 million versus 2024.

Question number 2 is about banks. Banks have buy acquisition option by EUR 33 million of new shares. The deadline is June 30. After this deadline, this are not valid anymore. We're getting close to the June 23. Any idea of what investors will do?

And last question about the turnover. In 2023, it was EUR 5.1 billion, in '24 EUR 4 billion, '25 EUR 3.8 billion. If the balance remains sound and resilient, the constant fall in turnover may trigger worries for years ahead. Do you have any specific ideas to change the trend?

[Interpreted] Well, first of all, about the paying out of dividends, as you said, it was exceptional because it is the sum of 90% of the overall cash generation for 2025 plus the money that will be collected during the stock warrants collection. So this will not be reproduced in the following years indeed. We decided with the Board of Directors not to wait 2027 to pay out the results of the stock warrants conversion results. So this takes place in 2026. It could have been only in 2027.

Regarding the comparison, the benchmark you're making. In 2024, we had disposed of that in Germany, and we had decided considering that it was definitely part of the cash flow generation to use the money to pay out EUR 1.5 dividend that was paid out last year, so EUR 1.5 per share. So what you see -- what we're doing, you see is compliant with our policy regarding shareholders as announced in 2024 between 90% -- 80% and 100% of cash generated to be paid back to shareholders no matter the way the cash flow is constituted. Then for the future, well, of course, it will depend on the company's capacity to increase its EBITDA ratio in the years ahead. But the first quarter of '26, we've been able to convert 60% of our EBITDA into cash -- cash flow.

Then for the warrants, these operations are done at the very last moment, i.e., June 30. So the stock warrants holders that are mainly banks, the 3 banks that were involved in the restructuring operations and that had received those banks -- those bonds in compensations for the haircut will indeed be able to use their options. The stock warrants, if you refer to the stock exchanges, is much higher than the current prices. So they will pay EUR 9.21 per share that they will receive. And this is the money that we will cash in. And therefore, we can consider paying out a dividend of EUR 1.75 per share at minimum.

So I don't believe that considering the current share price, these stock warrants shouldn't be exercised. Now regarding the future turnover, you're comparing years that are quite different. Remember, Germany still had a turnover in 2023, which was not the case in '24, and that explains why the turnover went down. And if you remember last year, our overall turnover was impacted by the currency exchange rates. In 2025, the euro-dollar ratio moved down to -- went up to 1.05 to 1.17. And that's why in this first quarter 2026, we decided to communicate in dollars just to avoid variations that are connected to these artificial ex to the currency exchange rates.

[Interpreted] Julie, [indiscernible] individual shareholders. Still on the subscription titles or stock warrants, can you tell us how much it represents? First of all, you show very strong ambitions for 2030. And considering the past history of the company and the cyclical nature, how do you believe these ambitions can be actually reached? And regarding the stock exchange curves, you talked about the SBF 120. This was not shown on the curves. You made a presentation way too fast. I couldn't follow.

Well, I can confirm that we overperformed the SBF 120. Regarding the stock warrants, EUR 123 million of titles -- subscription titles, and we bought by 5 million shares. So that will come less because we'll be able to have an equivalent of stock warrants by shares that are buyback. And therefore, these titles that are bought will not be converted into ordinary shares. We are part of a cyclical industry. You're right to say it, but it was even more true in the past. When we were involved in commodity businesses with low margins, by the way, this was even more cyclical. These are markets that greatly vary depending on the situation of the overall global economy. But since we are positioned on high-value products, that greatly decline -- decreases this cyclical nature. We are focusing on oil and gas and on nonconventional and offshore businesses. So less cyclical activity than the rest of oil and gas, by the way.

And we have talked about geothermal energy. And by 2030, I'm referring here to new energies that should account for 10% to 15% of our EBITDA. This will involve less cyclical operations. The only thing I can tell you is that we are a key stakeholder in the energy sector. Energy safety is at the heart of all countries' priorities around the globe. For sure, there will be more electrical users. All countries will consider the primary energies they can rely on to produce electricity. Those using oil and gas will most probably diversify their supply sources to factor in the current geopolitical situation. And they will most certainly focus on alternative sources of energy to produce power. Geothermal energy, of course, is part of the new options. Considering the group's positioning and the key importance of power in the global economy, I'm quite confident we have great opportunities to seize in using our know-how and grow still in a profitable way.

[Interpreted] [ Simul Tan ] individual shareholder. The Vallourec share was at the highest level, EUR 70, 5 to 6 years ago. Today, it's pretty much EUR 25 considering the past difficulties of the group. First of all, is your objective to go back to that high level, EUR 70 per share? And question number two is when and what time line? And last question is considering the current difficulties we're facing within the Middle East and the difficulties in some manufacturing sites, is this -- are these opportunities for new businesses or business options?

Well, the price of the share is interesting. But of course, what matters is market capitalization. The group has entered the CAC 40 many years ago. It went out of it when the group was nearly bankrupt. Back then, the market capitalization was above EUR 10 billion. It was EUR 10.6 billion, if I remember correctly. When the group was nearly bankrupt, this value went down to EUR 300 million. And today, we're back and we're close to EUR 6 billion. So that is what you need to focus on. Of course, those of you who had a share at EUR 70 also knew that there were successive share operations during recapitalization operations and when the prices went down over the years.

Your question about the current circumstances in the Middle East and elsewhere, are these opportunities for us to seize? Well, the answer is yes. For a simple reason, the 10 million of barrels that do not transfer from the Hormuz Strait will come from elsewhere. And many countries that used to supply -- to find supplies in the Middle East will go somewhere else. And the relay regions are regions where we are located, the U.S., Brazil, amongst others. And these are, for us, of course, opportunities to seize to boost our business in these very regions.

[Interpreted] Edouard [indiscernible] Capital. I have 3 short questions for you. First of all, and about the disposal of Arcelor. I understand the decision was made by them. My question is, were you informed. First of all, do you know what they intend to do with the 17 remaining percent if you had discussed this with them? And if you were informed, did you wonder about how do -- what to do with the EUR 110 million that were remaining in the operation?

Question number two is about the group strategy for the future, about the assets that are still to be sold. I know that you're top industrial player. Are these assets considered as core business? Or could they be sold in the future? And third question about the new energy sources and to understand if the situation will be the same as for oil and gas in terms of mix and margin, could you give us an idea of the turnover for 2030?

Well, ArcelorMittal, first of all, it is their decision indeed, and they are deciding to allocate the capital as they want it. Considering the share price, the bonus is quite important. And so they said in their press release. Did I wonder then about being part of it or taking part in this operation or not? Well, it so happened that we had discussed during the Board meeting about the implementation of the current share buyback plan. Considering these discussions and considering the fact that when I heard that the disposal will take place, the share price was above EUR 27. And with a discount that was a 7% to 8% we were still above the 25% -- what was the limit, threshold, the price at which I could still buy shares considering the resolution that was adopted in 2025. That's the reason why I did not -- I decided not to take part.

Regarding the assets of the group. Well, let me insist first on the fact, as I said, starting this meeting that in terms of performance, what is important is the return on capital employed in 2 ways. This is why we sold Serimax last year. And therefore, we are truly attentive to making sure that the assets that we're still holding are the assets that are necessary to deliver and to show the performance we want to reach. We're talking about the mining industry. It is an asset that generates EBITDA. You saw what it was last year, quite important, EUR 170 million that we are currently implementing a Phase 1 strategy that was profitable in 2025 already and Phase 2 that should be completed end of this year.

So anyway, what we need to focus on the return on capital employed. And what we intend to do is to increase the gap between the cost of the capital and the return on capital employed. This gap should be reduced, as Nathalie explained it beforehand because we are now investment grade. And doing future refinancing program, we will, of course, decrease the cost of our capital.

Regarding the new energy sources, I'm just reiterating what I said and what I've been saying for 4 years now. Our aim by 2030 is to generate between 10% and 15% of our EBITDA via nonfossil applications, geothermal source, carbon capture, hydrogen and hydrogen storage capacity. This has remained the same. I'm just repeating that objective and insisting on it even more so than, as I said beforehand, we have great successes in the field of geothermal, nonconventional geothermal businesses which are advanced activities, producing basic power in great quantities that are required by data centers that are multiplying in the U.S., first of all, and elsewhere.

Any other questions?

Thank you Mr. President. Hello, ladies and gentlemen, directors and administrators. I have 2 questions to ask about the dividend. Even though you somehow answered a previous question. My first remark is -- regarding Vallourec Essential on Page 5, there is a little mention about the first dividend paid out in 10 years. You have the same mentioned at the beginning of the report on Slides 5 and 6. But if I refer to resolution 3 on Page 59 of the brochure, and as you said it, last year, there was a dividend that was paid out. And that was a mistake, by the way, but I would like to be corrected because there were EUR 351 million that were paid out for 234 million shares. So it is mentioned that it is a dividend of EUR 1.50, but it's a 1.5 ratio. And as you said, the dividend is 1.5. I'm not here to criticize it's just a typo.

But why saying that it was the first dividend paid out in 10 years because there was one last year. So there was a benefit of EUR 178 million. That's not much, but so it is that you are not using to be paid out as an ordinary dividend. You are putting this EUR 178 million as a further contribution to the overall budget of EUR 2.22 billion, so EUR 2.222 billion, which is a good thing. You talked about an exceptional dividend. Did you get rid of the ordinary dividend because there was an exceptional dividend to be paid out just to keep more money for the future years. So first question is about the first dividend to be paid out in 10 years, which I don't understand. And second question is about the arbitration between regular and exceptional dividend to be paid out.

[Interpreted] I'll let Nathalie answer to, but last year's dividend was the first in 10 years. I was talking about last years, not this year's. This year is not the first. Secondly, since we chose not to wait for 2027 to return to shareholders the produce of exercising their BSAs, we don't have a common dividend, but an interim dividend this year, which will be paid out in August, later last year. Why August? Because that's after June 30. And after the Board meeting of July, where we will decide based on the number of shares bought back as part of the share buyback plan, the exact amount of the interim dividend. So one is replacing the other.

Well, the choice we could have made would have been to wait until next year to return the fruit of the conversion of the BSAs. And this year, we would have had a common dividend, 90% of the full cash generation of 2025. I think you can all agree with me that it's better to wait until August, so we can pay back to you 90% of the 2025 generation and the result of exercising VSAs -- stock warrants, sorry. Yes, we want to wait to be sure that the stock warrants have been exercised. And so we'll have EUR 305 million coming to us, so we can return it to us with the 90% of cash generated last year. That's the timing, which is unusual, right, early August. And technically, it will be an advance on dividend, a down payment on the dividend. We want to maximize the ROI to shareholders.

Very well. I don't see any other question. Thank you for your questions. And now [ Nora Lallauy], Meeting Secretary will remind us of how we're going to vote, and then we will vote on the resolutions.

Yes. Let me announce the final quorum. The attendance sheet shows 5,024 shareholder holding 177,294,155 shares out of the 55 million announced at the start corresponding to the equity. In attendance represented a quorum of 77.23%.

Before we begin the vote, let me briefly remind you of how the voting devices work. We will vote resolution by resolution using the device provided to you. Please make sure your smart card is currently inserted, the voting device is strictly personal. It shows exactly how many shares you hold or represent and the corresponding number of votes. For each resolution, you may vote as follows: press 1 if you're in favor, press 2 to vote against and then press 3 to abstain. Your vote is effectively counted when the message received appears on your voting device. If necessary, you may change your vote by pressing a different button provided that voting is still open.

The full text of the resolution is available in the notice of meeting published on the company's website. So I will just read out the titles of each resolution at the time of voting. And once the title of each resolution has been read out, we will immediately vote, and I will announce the vote is now open. You will then have 10 seconds to vote. And when the countdown is finished, I will announce the voting is closed, and you will no longer be able to vote. The results will be displayed on the screen in the room a few moments after voting closes. Let me remind you that for the adoption of ordinary resolution, a majority of 50% of the votes cast is required and to adopt extraordinary resolutions, a 2/3 majority of the votes cast is required.

Let's now vote for the ordinary business, First resolution, approval of the company accounts for the 2025 financial year. Please vote.

[Voting]

[Interpreted] Voting is closed, stop voting. The resolution is adopted.

Second resolution, approval of consolidated accounts for the 2025 financial year. Please vote.

[Voting]

[Interpreted] Please stop voting. Voting is closed. The resolution is adopted.

Third resolution, allocation of the profits for the 2025 financial year. Please vote.

[Voting]

Voting is closed. The resolution is adopted.

Fourth resolution, renewal of Mr. Philippe Guillemot's term of office as a director. Please vote.

[Voting]

[Interpreted] Voting is closed. The resolution is adopted.

Fifth resolution, renewal of the term of office of Ms. Angela Minas as a Director. Please vote.

[Voting]

[Interpreted] Voting is closed. The resolution is adopted.

Sixth resolution, renewal of the term of office of Ms. Hera Siu as a Director. Please vote.

[Voting]

[Interpreted] Voting is closed. The resolution is passed.

Seventh resolution, ratification of the cooptation of Mr. David Clarke as the Director. Please vote.

[Voting]

[Interpreted] Voting is closed and the resolution is passed.

Eighth resolution, approval of the information relating to the remuneration of each of the corporate officers for the 2025 financial year as required by Article L22-10-9 of the French Commercial Code found in the corporate governance report. Please vote.

[Voting]

[Interpreted] Voting is closed. The resolution is passed.

Ninth resolution, approval of the fixed variable and exceptional components of the total remuneration and benefits of any kind paid during the 2025 financial year awarded in respect of the same financial year, Philippe Guillemot in his capacity as Chairman and CEO. Please vote.

[Voting]

[Interpreted] Voting is closed, resolution passed.

Tenth resolution, approval of the remuneration policy for the Chairman and CEO for the 2026 financial year. Please vote.

[Voting]

[Interpreted] Voting is closed. The resolution is passed.

Eleventh resolution approval of the remuneration policy for directors other than the Chairman for the 2026 financial year. Please vote.

[Voting]

[Interpreted] Voting is closed. Resolution is passed.

12th resolution, authorization to be granted to the Board of Directors to trade in the company's shares. Please vote.

[Voting]

[Interpreted] Voting is closed, the resolution is passed.

13th resolution approval of the climate strategy. Please vote.

[Voting]

[Interpreted] Voting is closed, the resolution is passed.

Now to the Extraordinary General Meeting. 14th resolution delegation authority to the Board of Directors to decide on an increase in the share capital of the company or another company through the issue of shares and/or securities giving immediate or future access to the share capital whilst maintaining the preemptive subscription right. Please vote.

[Voting].

[Interpreted] Voting is closed. The resolution is adopted.

15th resolution. Delegation of authority to be given to the Board of Directors to decide on an increase in the share capital of the company or another company through the issue of shares and/or securities conferring immediate or future rights of the share capital with the removal of preemptive subscription rights by way of a public offering other than the public offerings referred to in paragraph 1 of Article L411-2 of the Monetary and Financial Code. Please vote.

[Voting]

[Interpreted] Voting is closed. The resolution is passed.

16th resolution. Delegation of authority to be granted to the Board of Directors to decide on an increase in the share capital of the company or another company through issuing shares and/or securities giving immediate or future access to the share capital with the cancellation of preemptive subscription rights by way of a public offering as referred to in paragraph 1 of Article L411-2 of the Monetary and Financial Code. Please vote.

[Voting]

[Interpreted] Voting is closed. The resolution is adopted.

17th resolution. Delegation of authority to be granted to the Board of Directors to increase the number of securities to be issued in the event of a capital increase with or without the maintenance of preemptive subscription rates. Please vote.

[Voting]

[Interpreted] Voting is closed. The resolution is adopted.

18th resolution, delegation of authority to be granted to the Board of Directors to issue shares and/or securities, giving immediate or future access to the share capital without preferential subscription rights in consideration for contributions of the kind consisting of equity securities, securities giving access to the share capital except in the case of a public exchange offer initiated by the company. Please vote.

[Voting]

[Interpreted] Voting is closed. The resolution is adopted.

19th resolution. Delegation of authority to be granted to the Board of Directors to issue shares under securities conferring immediate or future rights to the share capital without preferential subscription rights in the event of a public exchange offer initiated by the company. Please vote.

[Voting]

[Interpreted] Voting is closed. The resolution is adopted.

20th resolution. Delegation of authority to be granted to the Board of Directors to issue shares in the company without preferential subscription rates as a result of the issue by subsidiaries of the company of securities giving access to shares in the company. Please vote.

[Voting]

[Interpreted] Voting is closed. The resolution has passed.

21st resolution delegation of authority to the Board of Directors to increase their share capital by capitalizing additional paid-in capital reserves, profits or any other amount, please vote.

[Voting]

[Interpreted] Voting is closed. The resolution is adopted.

22nd resolution. Authorization to be given to the Board of Directors to grant free shares. Please vote.

[Voting]

[Interpreted] Voting is closed. The resolution is adopted.

23rd resolution. Delegation of authority to the Board of Directors to issue shares and/or securities with immediate or deferred rights to shares without preemptive subscription rights for subscription by members of employee share ownership plans. Please vote.

[Voting]

[Interpreted] Voting is closed. The resolution is passed.

24th resolution. Delegation of authority to the Board of Directors to issue shares and/or securities with the immediate or deferred rights to shares without preemptive subscription rights to our employees and corporate officers of the company and Vallourec Group companies related to the company within the meaning of Article L225-180 of the French Commercial Code other than members of an employee share ownership plan. Please vote.

[Voting]

[Interpreted] Voting is closed. Resolution is adopted.

25th resolution. Authorization and approval of the amendment of the terms and condition of BSAs to allow the delivery of new or existing shares upon exercise at the option of the company. Please vote.

[Voting]

[Interpreted] The voting is closed. Approved.

26th resolution. Amendment of Article 10, organization and operation of the Board of Directors of the Articles of Association considering the amendment of the age limit of the Chairman of the Board of Directors. Please vote.

[Voting]

[Interpreted] Voting is closed. Adopted.

27th resolution. Harmonization of the articles of association with applicable legal and regulatory provisions. Please vote.

[Voting]

[Interpreted] Voting is closed. Resolution is passed.

Ordinary meeting now.

28th resolution. Powers for formalities. Please vote.

[Voting]

[Interpreted] Voting is closed. Resolution is passed.

[Interpreted] Thank you, Nora. Ladies and gentlemen, dear shareholders, in 2025 -- Well, thank you, Nora. Ladies and gentlemen, dear shareholders, in 2025, we reached new decisive milestones. First significant dividend paid out to our shareholders in 10 years, a return to investment-grade status and a significant reduction of the profitability gap with our main competitor. Our successes these recent years are the result of bold decisions and daily commitment of our teams. I would like to thank them once again.

Vallourec's foundations are stronger than ever, and our trajectory remains ambitious. I would like to thank you sincerely for the trust you have placed in me. It is an honor and a responsibility that I fully appreciate. Leading Vallourec means steering a company with an exceptional industrial and human resources. It is with great excitement that I embark on this new chapter alongside our teams to implement our plan called from good to great. I look forward to sharing with you the future successes of Vallourec.

Thank you for your attention and for your trust. This closes this Annual General Meeting.

[Portions of this transcript that are marked [Interpreted] were spoken by an interpreter present on the live call.]

Good day, and welcome to Vallourec's 2026 First Quarter Results Presentation hosted by Philippe Guillemot, Chairman of the Board and Chief Executive Officer; and Nathalie Delbreuve, Chief Financial Officer. [Operator Instructions] And now I would like to hand the call over to Daniel Thomson, Director of Investor Relations. Please go ahead, sir.

Thank you, Laura. Good morning, ladies and gentlemen, and thank you for joining us for Vallourec's First Quarter 2026 Results Presentation. I'm Daniel Thomson, Director of Investor Relations at Vallourec. I'm joined today by Vallourec's Chairman and Chief Executive Officer, Philippe Guillemot; and Vallourec's Chief Financial Officer, Nathalie Delbreuve.

Before we begin our presentation, I would like to note that this conference call will be recorded. A replay will be available following the call. You can find the audio webcast on our Investor Relations website. The presentation slides referred to during this call are also available for download here. Today's call will contain forward-looking statements. Future results may differ materially from statements or projections made on today's call. Forward-looking statements and risk factors that could affect those statements are referenced on Slide 2 of today's presentation. These are also included in our universal registration document filed with the French Financial Markets Regulator, the AMF. This presentation will be followed by a Q&A session. I will now turn the call over to Philippe Guillemot.

Thank you, Dan. Welcome, ladies and gentlemen, and thank you for joining us to discuss Vallourec's first quarter 2026 results. You can see today's agenda on Slide 3. Before we discuss today's results, I want to briefly address the situation in the Middle East and what it means for our employees. From the very beginning, ensuring the safety of our people has guided every decision we have made. Given our strong footprint in affected areas, I would like to express my deep appreciation to our teams for their dedication and professionalism over the past several months.

Now let's turn to Slide 5 to discuss our results and outlook. As described in our press release this morning, we have changed the presentation currency from the euro to the U.S. dollar, which better reflects the performance of our activities, which are mainly carried out in U.S. dollars. In the first quarter, we delivered robust results with group EBITDA of $220 million or EUR 187 million, above the midpoint of our guidance. EBITDA margin improved by 200 basis points sequentially to 22.6%, thanks to our intense focus on execution and cost management. In the Tube segment, EBITDA -- in the Tube segment, EBITDA per tonne of $724 returned to the high point we achieved in Q3 last year, above our guidance provided in February. This was achieved despite the challenging environment in the Middle East.

We generated strong cash flow once again, converting over 60% of EBITDA to cash, which was 10 percentage points higher than in Q1 2025. This clearly demonstrates the continued improvement in our earnings quality, driven by our strong focus on operational efficiency and working capital management. After $107 million of share repurchases, we increased our net cash position to $67 million at the end of the quarter. Turning to the outlook. We expect tubes volumes and EBITDA per ton to decrease sequentially in the second quarter, temporarily impacted by the Middle East conflict, which I will provide further details on later in the presentation.

In mine and forest, production sold is expected to be around 1.4 million tonnes. As a result, we expect Q2 EBITDA to range between $175 million and $205 million. We expect Q2 to represent the low point with improvement in EBITDA in H2. In the U.S., booking activity remains very strong, and we are seeing certain customers preparing to increase drilling activity. This, combined with lower imports and recently announced trade investigations is leading to improved market pricing to be reflected in our results from the third quarter. In international markets, our primary customers in the Middle East have remained resilient. Meanwhile, in select Middle East countries where we do not maintain local presence, order postponements and shipping delays have impacted our invoicing cadence. Outside the Middle East, tendering activity is high, and we see customers moving to accelerate their development activity, notably in offshore markets. We expect to communicate on several important high-value contracts awarded in this domain over the coming weeks.

In New Energies, we see clear commercial momentum demonstrated by the recent signing of our long-term agreement with Fervo Energy worth up to $800 million in potential revenue over the next 5 years. This follows the announcement in January of our partnership with XGS, proving the need for reliable, clean baseload energy to facilitate data center build-out in the U.S. I am pleased to announce that Vallourec will host a deep dive on the geothermal market and our favorable positioning on June 15 to further illuminate this long-term opportunity for our investors and stakeholders. Turning to capital allocation. We repurchased EUR 91 million of shares in Q1. While the pace of the buyback has slowed, we reiterate that any unused funds from the program will be added to the interim extraordinary dividend in August.

Let's move to Slide 6. With the excellent tubes performance in Q1, we delivered a higher quarterly EBITDA per tonne than our primary peer for the first time since the launch of the new Vallourec plan. We also continue to outperform on return on invested capital. These results demonstrate the effectiveness of our value-over-volume strategy, excellent cost adaptation enabled by our fit-for-purpose industry footprint and our ongoing efforts to improve the efficiency of our operations. Turning to Slide 8 for an overview of the Middle East markets in the context of the ongoing conflict. The region accounted for 22% of our tubes revenue in 2025 within the typical contribution of 20% to 25%. Importantly, Saudi Arabia and the UAE, where we have local presence, account for around 2/3 of our Middle East sales. It is also worth highlighting that most of our sales are focused on onshore drilling applications where rig activity has been more stable compared to offshore applications since the onset of the conflict.

In Middle East, countries which we serve directly from our export hub in Brazil and China, OCTG demand has remained resilient. We have not seen any order cancellations to date. However, we have been experiencing select order postponement and shipping delays in certain countries. We continue to work closely with these customers to leverage alternative logistic routes to support their current programs and recovery plans. Notably, thanks to the commitment of our teams, revenue in the region increased year-over-year in Q1.

Let's turn to Slide 9 for a closer look at Vallourec's operating model in the key Middle East markets. In Saudi Arabia, which accounts for more than 50% of the regional rig count, Vallourec has a strong local presence. In this market, domestic steelmakers typically source iron ore from India delivered through Oman. We source the majority of our semifinished tubes locally from suppliers such as MPTG. We then heat treat and thread these tubes in our in-country facility in Oman. We also provide tubular management services, including warehousing at our yards and therefore, maintain several months of finished tubular inventories. This local presence ensures that we are well equipped to continue supporting our key customers in the current environment.

In the UAE, we also provide tubular management services and therefore, maintain several months of inventory on behalf of our major local customer. However, this market is served from our international export hubs. We have tested and approved alternative routes bypassing the Strait of Hormuz to serve our customers, including ports in Oman and the Red Sea. Outside of Saudi Arabia and UAE, we serve customers directly from our export hubs and do not maintain significant inventories on the ground. So far, we have seen a limited number of shipments being diverted or offloaded for future delivery. We continue to work with our customers to use alternative logistic routes, including trucking. Overall, for our largest customers in Saudi Arabia and UAE, business has largely continued uninterrupted, while we are experiencing select order postponement and temporary delays in shipping in the remaining countries. For these reasons and assuming no further deterioration, we maintain our outlook for higher volumes internationally in the second half.

Let's turn to Slide 10 to examine how Vallourec is poised to respond to increased drilling activity. With the increase in oil and gas prices and rapidly strengthening supply fundamentals, our customers around the world are beginning to respond by accelerating their development plans. We expect this increase in activity to translate first to higher short-cycle activity in regions like the U.S. and in certain offshore tieback projects, while longer cycle projects should support higher activity from 2027 onwards. We expect higher levels of tubular demand as a result, and we are well positioned to deliver incremental volumes as we support our customers with their plans. As we highlighted last quarter, we are making several investments into value-added downstream capacity that will debottleneck our operations. This now also includes the upgrade of our recently acquired coating facility in Brazil.

Turning to our new energies offering on Slide 11. As energy security concerns play an increased role in nation level decision-making, we have developed proven technologies that support countries to develop and store more of their own energy sources. This includes traditional and next-generation geothermal tubular solutions, our Delphy vertical underground storage solution for green hydrogen and tubular solutions for the underground storage of natural gas and CO2. We have also entered into collaborations with key stakeholders to explore and support the development of white or naturally occurring hydrogen and helium production.

Now let's turn to the international OCTG market on Slide 12. You can see on the left chart, demand remained stable in international markets outside the Middle East in Q1. Within the Middle East, you can clearly see the divergence between onshore activity, which was relatively stable and much weaker offshore activity. I remind again that Vallourec is mostly exposed to onshore drilling activity in the region. Impacts by country vary widely. And in fact, Saudi Arabia's rig count has increased in every month in 2026 so far, confirming the activity acceleration expected this year despite the conflict.

Looking ahead, we are encouraged by the size and breadth of the tendering opportunities we see in both OCTG and our line pipe business, many of which relate to offshore and deepwater development in both established and emerging basins with favorable economics. We also continue to see robust and growing demand in markets with higher levels of unconventional activity. On the right-hand chart, the latest outlook from Rystad shows an inflation in market pricing in Q1. As mentioned on previous calls, our premium portfolio allow us to outperform this indicator.

Let's turn to Slide 13, where we focus on the U.S. market. On the demand front, the oil rig count remained stable over Q1 and has not yet responded to higher prices. That said, recent market commentary and the bookings cadence of our customers suggest higher levels of activity are planned from H2 2026. Gas-directed activity fell slightly over the quarter, but remains up around 20% year-on-year. We expect gas-related drilling to be well supported by increasing demand for U.S. LNG as projects come online and the U.S. substitutes for gas blocked behind the Strait of Hormuz.

Looking at the supply side, imports remain below the 12-month average in the year-to-date, especially for seamless products. We expect the recently launched investigation into unfair trade practices in Austria, the largest single source of seamless imports as well as Taiwan and the UAE to result in greater market share for local producers such as Vallourec. On the right, seamless spot pricing has increased every month since January and distributor sentiment has rapidly improved. We will see the benefit of higher prices in our P&L from the third quarter. Overall, we see a positive oil and gas market ahead, complemented by the growing activity levels of our existing and prospective geothermal customers. I will now hand the call over to Nathalie to comment our financial results.

Thank you, Philippe. Let me now walk you through our Q1 2026 results. For the first time this quarter, they are displayed in U.S. dollar as the group changed the reporting currency of its consolidated financial statements as of January 1, 2026. The reason for this change in reporting currency from euro to U.S. dollar is to better reflect the performance of our activities, most of our revenues being denominated in U.S. dollars and to make our financial information more readable as our main customers and main peers already report in U.S. dollars. To ensure a smooth transition, you can still find all our usual figures denominated in euro in the appendix of our results press release published this morning.

Starting on Slide 15. We see on this slide our execution track record with key metrics. In Q1, as I will now show you, we have delivered another strong quarter despite the ongoing disruption in the Middle East adding further challenges, resilient margins and strong cash generation, leading to further balance sheet strengthening. Group EBITDA on the top left, the margin was strong at 22.6% in Q1, improving versus Q4 2025. It reflected a more favorable product mix and strong cost adaptation. Total cash generation in the quarter remained robust at approximately $135 million, reflecting stable free cash flow and lower restructuring and nonrecurring items year-over-year. Net working capital days were kept below 90 days in Q1 at 86 days with a slight increase mainly as a function of the decline in volumes and revenues. In Q1, we still released cash from working capital. Net cash at the end of the quarter is positive and slightly stronger than at the end of December 2025 after $107 million share buyback. So in Q1, we continued to build on our solid track record.

On Page 16, group revenues amounted to $975 million, down sequentially, mainly due to lower shipments to the Middle East and to the Gulf of America. However, EBITDA reached $220 million, slightly higher than Q1 2025. The year-over-year slight improvement was driven by higher pricing and improved mix over all regions in tubes, partially offset by lower volumes in tubes and a lower contribution from mine and forest. Adjusted free cash flow was $177 million, demonstrating strong cash conversion again this quarter. We ended the quarter with a net cash position of $67 million, an improvement of $21 million versus year-end 2025 after $107 million of share repurchases.

On Page 17, in tubes, volumes sold declined to 272,000 tonnes, reflecting temporary shipment delays and select order postponements to the Middle East as well as lower shipments mainly to the Gulf of America. Average selling price, as you can see, remained high at $3,304 per tonne, supported by an improved mix. Geographically, on the bottom of the slide, we can see a higher share of revenues from the Middle East compared to Q1 2025. This is supported by resilient customer activity, especially in Saudi Arabia and in the United Arab Emirates. Moving to Tubes profitability on Slide 18. Despite lower volumes versus Q4 2025, tubes EBITDA remained at a high level at $196 million, and the EBITDA margin significantly increased quarter-over-quarter to 22%. EBITDA per tonne reached $724, up 14% sequentially and 31% year-over-year. This strong performance reflects a favorable mix as we maintain our focus on value over volume and the very good adaptation of our cost base during the quarter.

Turning to mine and forest on Page 19. Production sold amounted to approximately 1.3 million tonnes, down 15% year-on-year. This was mainly impacted by record rainfalls in the Minas Gerais region during the quarter. Segment revenues were stable at $95 million. EBITDA for the quarter is $38 million with margin of approximately 40% with lower iron ore volumes and some negative FX effects. On Slide 20, we continue to deliver, as you can see, a solid bottom line on this chart. In Q1 2026, net income group share was $87 million, that is 9% of total revenue. From EBITDA to net income, we can see depreciation and amortization, very much in line with previous quarters in Q4 2025, financial results as well at minus $20 million. And the other pillar of the bridge is quite limited. It includes, as usual, restructuring and some one-off impacts.

Turning to Slide 21. Cash generation remained very strong with adjusted operating cash flow less CapEx at around 56% of EBITDA. We achieved a further working capital release in Q1 following the Q4 performance, mainly reflecting disciplined inventory management and solid collections. CapEx increased slightly quarter-on-quarter, but well in line with our expectations, that is to be towards the upper end of our previously stated EUR 150 million to EUR 200 million range, that is USD 175 million to USD 235 million. On Slide 22, you can see that our financial position remains very strong. As of March 31, 2026, our net cash position amounted to $67 million with gross debt reducing to $994 million. Liquidity remained strong at approximately $1.9 billion. This robust balance sheet gives us significant flexibility to navigate market volatility and continue investing in select growth opportunities. I will now hand the call back to you, Philippe.

Thank you, Nathalie. Let's turn to Slide 23 to discuss our outlook. Starting with our tubes business. In the second quarter, we expect volumes and EBITDA per tonne to decrease sequentially given a longer period of disruption in the Middle East compared to the first quarter. We expect to be compensated for certain configurated costs later in the year. For the full year, we expect sustained strength in sales volume, thanks to Vallourec's market share gains during 2025 and higher activity levels among certain customers. We expect U.S. market prices to increase further on improving industry supply-demand conditions, more than offsetting increases in energy and raw material costs.

In our international tubes business, we continue to expect lower sales volume in H1 2026 due to slower bookings in H2 2025 and the previously mentioned logistical delays in some Middle East markets. We see activity recovery in key international markets, setting the stage for higher second half volumes, assuming no further deterioration in the present Gulf. We expect market pricing to remain broadly stable versus the second half of 2025 with discrete customer contracts driving selective price upside. For mine and forest, we expect production sold to be around 1.4 million tonnes in the second quarter, and we confirm our prior full year guidance for 5.5 million tonnes of sales volume. At the group level, we expect our second quarter EBITDA to range between $175 million and $205 million with Q2 expected to be the low point of the year.

Let's conclude on Slide 24. We are delivering further improvements in profitability driven by our intense focus on operational excellence and cost management. Our local presence and product mix is supporting performance in key Middle East markets with resilient customer activity. We see high tendering activity in international market, setting the stage for volume growth from H2 2026. Meanwhile, certain U.S. customers are increasing their booking cadence with upside for U.S. pricing. Thank you again for your attention. Nathalie and I are now ready to take your questions.

[Operator Instructions] We have a question from Matt Smith from Bank of America.

I wanted to start on costs, if I could. Exceptional cost control in the first quarter, a very strong EBITDA per tonne number in tubes despite the lower top line that you've referred to. Could I just come back to picking into the details a bit, yes, how much of that is product mix shipped in the quarter? I suppose just trying to get to how sustainable the current cost level that you booked in the first quarter is.

And I suppose could I tack on to that -- could additional costs related to logistics in the Middle East change that picture at all on the cost line as we go through the year, please? And then the second question would be turning to the U.S. As you noted, seeing some early signs of increased activity, certainly seeing signs of increased pricing. I guess my question was just, do you -- from a Vallourec perspective, do you see upside in terms of sales volumes as well to your U.S. unconventional customers? Where are you versus your maximum capacity, I suppose, is my question.

Going back to your first question, in fact, we have to go back to the new Vallourec plan. You see what is our industrial footprint today and the geographies where we are operating. And what you see in Q1 numbers is the consequence of this new Vallourec plan. We are in geographies where we know how to flex capacity when volumes are decreasing. And as a consequence, we are able to post positive margin even with fairly low volume in some of the plants we have in these regions. So this is structural today. This is a given. This is an asset. And this means, by the way, that we have a significant operating leverage. When volume will pick up, obviously, this will translate in even better margin.

So the mix has obviously a role to play. But here in the case of Q1, definitely, it's our ability to manage cost to flex capacity when needed that has led to this very strong EBITDA per tonne, which is, as we mentioned, higher than our main peer. Going to the U.S. Volume has been strong for the last few months. As we said, we anticipate it will be the case in the next few months, too. And you saw last year that we announced a major investment in our Youngstown plant with a new line to produce our latest generation of high-torque connection. So this will come live at the beginning of next year. So this is just an example of what we do and where we invest in order to be able to obviously capture additional volume.

We have a question from Guilherme Levy from Morgan Stanley.

I have 2 questions, please. The first one on your second Q guidance. Could you perhaps walk us through the building blocks between the low end and high end of the guidance and how that relates to the sort of timing assumption that you are working with in terms of the reopening of the strait? And then secondly, you mentioned a compensation for cost overruns post second Q this year. Could you also say a few words about insurance discussions, how that compensation might take place? And if the recovery of those costs is expected at the moment more for 3Q? Or is there any chance that, that could potentially slip into next year?

Yes. As usual, we give a range for our guidance. So obviously, impact Q2, as I said earlier, we see some impact volume in Middle East and extra cost that, as you mentioned, will be negotiated with customers and recovered later after Q2. Typically, logistic costs. We have alternative routes to deliver. This incur additional costs to be discussed and negotiated with customers, which, by the way, I understand that obviously, they need to look at it and enter in a fair negotiation on this cost because they need us today. They need us to continue to operate as they are, especially the one who are still at full stream like ADNOC in UAE. So I think, yes, that's normal life. That's part of the business. Will we conclude all this negotiation in H2 and some of it in early '27, could be. We'll see. But today, we see a goodwill on our customer side to enter into this discussion for the reason I explained earlier.

Now let's step a bit backward. One assumption behind Q2 about the Strait of Hormuz. Let's put things in perspective. Again, I keep telling you, 2/3 of our revenue in Middle East is with customers that can bypass the Strait of Hormuz. Aramco, where we have a significant local content, as you have understood from my description and ADNOC that we can deliver using other ports and trucks to deliver the pipe.

So even if the Strait of Hormuz remain closed for a while and as long as these 2 customers continue to operate, I think we will continue to perform in the regions. And we will continue to have volume maybe even higher this year than they were last year in the region as we had in Q1. So -- and if the Strait of Hormuz remain close even longer, it's likely that other regions in the world where we are will compensate for the few countries that are depending on the Strait of Hormuz. It could be the U.S., could be Brazil, where we are, as an example. So again, this is just to illustrate the fact that we are very -- as Vallourec, very resilient in the current circumstances.

We have a question from Jean-Luc Romain from CIC CIB.

I have 2 questions, if I may. First question is about your new framework agreement with Petrobras, which starts in Q4. Do you expect more volumes or more prices or both? And what kind of increment should we expect in terms of mix price? Is it 1 figure, 2 figures? I'm not sure you want to tell this. Second question is about an investment in geothermal previous management did in GreenFire Energy in 2022. Could you update us on this investment?

Petrobras, as you mentioned, we expect the first volume of this new long-term agreement to come end of the year, in Q4 this year. But what's going on right now just make this contract even more valid. As I said in my comments, we see a lot of offshore activity and tendering activity, and we will announce in the next few weeks a few major contracts in this area, both in OCTG and line pipe. So more to come. And even more in line pipe, as you know, we have now added the thermal insulation business to our portfolio with the acquisition of Thermotite do Brasil, which is running at full speed right now and that obviously, we invest into.

You mentioned the investment in GreenFire, which happened just at the time I joined. So it was not my decision. Nevertheless, it was a bet. When you invest in new development, new start-up, sometimes you win, sometimes you lose. But I won't say that GreenFire was a great bet. Nevertheless, we have starting in '22, started to work with AGS, with Fervo, and we help them to develop their new geothermal concept, advanced and enhanced geothermal concept. And this one are very successful. And when you see at Fervo, the contract we have signed and the volume, obviously, we have already now this year with them, it's definitely a clear success. More to come on June 15, we'll have the opportunity to obviously tell you more about this new geothermal concept, our contribution to their development and obviously what potential market it represents for Vallourec.

[Operator Instructions] We have a question from Guillaume Delaby from Bernstein.

Yes. Congrats for the results, and I think it's a great stuff to organize Geothermal Day because it's going to be significant. I would like maybe to come back to the first question, the question of future operating leverage. So a naive analysis for your kind of industrial business is you increase EBITDA and EBITDA margin by a combination of growing volumes and higher pricing. Up to now, we had higher EBITDA, mainly thanks to value over volume, but -- in fact, we -- you increased EBITDA despite a decline in volume. So my question is very, very simplistic. If we have an increase in volume in Q4 2025 -- in Q4 2026 and in 2027, this should logically, correct me or not, translate into significant operating leverage, correct?

Yes. So thank you, Guillaume, for your comments. Operating leverage, yes, you remember that after the new Vallourec plan, I announced that we have launched a new plan whose name is From Good to Great. So we have many activities to improve our way of managing our operations. And all this starts to translate into the numbers you see in Q1 beyond the higher flexibility we have on our cost. Obviously, we are improving on every front. Making things good first time makes a difference at the end of the day on our cost structure. So this is what you see. And obviously, there is more to come because it's a multiyear program, which we are deploying throughout the group.

So going back to your question, can we expect when volume will increase to see -- the impact of this ability to better manage cost, to reduce costs, combined with the already value over volume and pricing strategy. Yes, definitely, I can answer positively. You remember that when I launched the new Vallourec plan, I had 2 main objectives: one, to make the balance sheet of the group net debt 0. This was achieved end of '24 and to close the margin gap with our main peer. And you can see quarter after quarter how we progress towards this objective. So I remain totally focused with my team to deliver, obviously, this second objective.

[Operator Instructions] There are no more questions at this time. So I hand the conference back to the speakers for any closing comments.

Thank you. While there is much uncertainty around the situation in the Middle East, I'm confident that our business can adapt more rapidly than before and take advantage of the improving medium-term outlook we see ahead. With our local industrial footprint and premium technical offer, alongside ongoing efforts to improve Vallourec's operations and capture rapidly expanding addressable markets in new energies, we are well positioned to drive further value creation. Operator, you may end the call.

Good day, and welcome to Vallourec's 2025 Full Year Results Presentation hosted by Philippe Guillemot, Chairman of the Board and Chief Executive Officer; and Nathalie Delbreuve, Chief Financial Officer. [Operator Instructions]

And now I would like to hand the call over to Daniel Thomson, Director of Investor Relations. Please go ahead, sir.

Thank you. Good morning, ladies and gentlemen, and thank you for joining us for Vallourec's Fourth Quarter 2025 Results Presentation. I'm Daniel Thomson, Director of Investor Relations at Vallourec. I'm joined today by Vallourec's Chairman and Chief Executive Officer, Philippe Guillemot and Vallourec's Chief Financial Officer, Nathalie Delbreuve.

Before we begin our presentation, I would like to note that this conference call will be recorded. A replay will be available following the call. You can find the audio webcast on our Investor Relations website. The presentation slides referred to during this call are also available for download here. Today's call will contain forward-looking statements. Future results may differ materially from statements or projections made on today's call. The forward-looking statements and risk factors that could affect those statements are referenced on Slide 2 of today's presentation. They are also included in our Universal Registration Document filed with the French Financial Markets regulator, the AMF. This presentation will be followed by a Q&A session.

I'll now turn the call over to Philippe Guillemot.

Thank you, Dan. Welcome, ladies and gentlemen, and thank you for joining us to discuss Vallourec's fourth quarter and full year 2025 results. You can see today's agenda on Slide 3. I will move directly to Slide 5, where I will start by discussing the highlights of 2025. 2025 was another transformative year for Vallourec. We progressed several major strategic initiatives and achieved key financial milestones. We continue to drive operational excellence through the organization, including the execution of our cost reduction program in Brazil completed in Q2 ahead of schedule. We significantly narrowed the profitability gap with our primary peers, demonstrating the effectiveness of our strategy and execution. We stayed true to our value-over-volume operating model, securing a new and enhanced long-term agreement with Petrobras, winning major high-value tenders across the Middle East and driving market share and margin growth in the U.S. through our domestic footprint.

We continue to streamline our sources and uses of capital, executing the sale of our non-core Serimax welding operations and redeeming 10% of our long-term notes. Importantly, we also positioned the company for profitable growth. We successfully acquired and integrated Thermotite do Brasil, adding to our line pipe coating capabilities. These are increasingly serving as a key differentiator in deepwater projects. In the U.S., we broke ground on a USD 48 million premium threading line investment in Youngstown to increase capacity to thread VAM high-torque connections, which are increasingly used in onshore wells with long laterals.

We made further progress on the Phase 2 extension of the mine ahead of expected completion in 2027. As Nathalie will discuss, we built on our growing track record of consistent cash generation with over EUR 400 million of total cash generated in 2025 for the third straight year. These improvements in our profitability and financial resilience were recognized with investment-grade credit ratings across all 3 rating agencies, setting the stage for further optimization of our balance sheet on more favorable terms. Finally, in May, we paid a substantial dividend to shareholders for the first time in a decade, executed a minor buyback and work to enable our much more significant 2026 share buyback.

Let's turn to Slide 6 to discuss our results and outlook. In the fourth quarter, we delivered solid results once again with group EBITDA of EUR 214 million, above the midpoint of our guidance. This came with a robust 21% margin. We delivered excellent total cash generation of EUR 177 million, thanks to robust collection and inventory management. In the first quarter, we expect tubes EBITDA per tonne to remain stable sequentially, while volumes will be below the Q4 2025 level due to slower international bookings in H2 2025. In Mine & Forest, production sold is expected to be around 1.4 million tonnes. As a result, we expect Q1 EBITDA to range between EUR 165 million and EUR 195 million. In the U.S., our assets remain highly utilized and recent booking activity remains strong. Industry pricing has softened slightly, but we are encouraged by the downward trend in imports and the resilience of our customers' activity.

In international markets, commercial activity remains somehow subdued in H2 2025. But in the Middle East, we are now seeing clear signs of acceleration, especially in markets with higher level of unconventional activity. We see potential for activity to increase in the second semester and beyond as the oil market rebalances, gas-related activity increases and our customers face accelerating decline rates.

Turning to capital allocation. We are making good progress with our EUR 200 million buyback announced in January with EUR 150 million remaining under the current program. We have purchased 3 million shares year-to-date.

Now let me provide you with an update on 2026 shareholder return on Slide 7. Today, I am pleased to announce Vallourec's expectation to propose in addition to the EUR 200 million share buyback, an interim dividend of approximately EUR 450 million to be distributed in the third quarter this year. This would take the total return to shareholders to approximately EUR 650 million between January and August 2026, representing a year-on-year increase of around EUR 280 million. This distribution represents approximately 90% of our 2025 total cash generation and 100% of the proceeds of the warrants, which are expected to be exercised before the end of June.

We have adopted a balanced distribution framework, limiting warrant dilution through buybacks, growing our dividend and maintaining a defensive balance sheet. Based on our current share price, this distribution represents a potential interim dividend of EUR 1.75 per share including the anticipated dilution from the exercise of warrants. This is a healthy increase of EUR 0.25 compared to last year's EUR 1.5 per share.

Turning to Slide 8. We show the usual comparison versus our primary public peer. The trend is clearly positive over the past year, and we remain focused on eliminating the gap entirely. We continue to outperform in terms of return on capital, which is a key focus of our medium-term road map.

And on that note, let's turn to Slide 10 for an update on our strategic priorities. We have made substantial efforts to streamline our core asset base over the past several years, but there is still work to be done. Our key strategic priorities in 2026 are directed at unlocking this potential. First, we will continue to drive operational excellence throughout the group. This is not a passive process. We are actively implementing a new management system, which is firmly results-driven and embedded in daily operations across all business functions. Bertrand Frischmann, our Chief Operations Officer, is responsible for its implementation. We look forward on sharing more about this program with you in the coming months.

Secondly, we will continue to optimize our asset base to drive improved return on capital. And third, we are actively investing to position ourselves for profitable growth. Let me talk about a few examples on the later 2 initiatives now. Let's turn to Slide 11. Here, you can see the targeted set of high-return projects we have executed since the launch of the new Vallourec plan in 2022. You will recall we began with a major downsizing of our rolling capacity in Germany and rightsizing in China and ultimately Brazil. We made the strategic decision to close loss-making capacity and exit low-margin business. More recently, our focus has turned to the upstream and downstream elements of our value chain and is more about enabling profitable growth than shrinking our assets.

In our upstream process, we have invested to expand capacity for high-quality iron ore production at our mine in Brazil. Production from the Phase 1 extension started at the end of 2024. We are now working on Phase 2 with completion still scheduled for sometime in 2027. We are now undertaking projects to reconfigure our steelmaking assets in Brazil to reduce complexity and maximize operational flexibility, including the ability to run our steelmaking operations without the use of our blast furnace. In our downstream operations, we are investing heavily in our flaring and coating capabilities where technology barriers and returns on capital are higher.

We are adding to our threading line capability in the U.S., adding both large diameter and high torque capabilities. Meanwhile, we see significant opportunities in advanced coating solutions and we'll be investing in both line pipe and OCTG coating line this year. All of these projects will be executed within our expected CapEx envelope of EUR 150 million to EUR 200 million on top of significantly increased spending on safety initiatives as laid out in our capital allocation framework.

Let's turn to Slide 12. to discuss one way in which we are positioning for profitable growth. At our Capital Market Day in 2023, we highlighted our favorable positioning in the conventional geothermal market and the upside that could materialize in more advanced technologies. We are now seeing clear signs that these next-generation technologies are moving towards widespread adoption. The momentum is driven by rising demand for low carbon baseload and dispatchable power with AI hyperscalers investing heavily to secure supply. The IEA has recently highlighted a fivefold surge in next-generation geothermal financing over the past 3 years to $2.2 billion in 2025. The increase in financing has been underpinned by rapid technological progress, much of which relates to learnings from the shale industry. With drilling and well costs representing up to 80% of total cost, significant improvements in drilling speeds are dramatically improving geothermal project economics.

You can see the high potential of this market in the chart on the right, which comes on top of expected growth in conventional geothermal. We are already experiencing a significant increase in our geothermal bookings as our customers begin to execute on development pipelines that are orders of magnitude above today's installed capacity. We are uniquely positioned to benefit from this growth, thanks to our domestic footprint in the 2 largest markets for geothermal today, the U.S and Indonesia. Our cutting-edge research and development expertise has allowed us to continuously improve our product offering to meet the high demand of geothermal wells placed on tubular products. And we can pair these products with our world-class service offering.

Let's look more closely at the next-generation geothermal opportunity. I am on Slide 13. You can see the elements that differentiate traditional geothermal from next-generation applications. On the left, you have conventional geothermal, which has seen steady growth over time but is restricted by the requirements for hot water reservoirs and sufficient subsurface permeability. In the middle, enhanced geothermal mitigates the permeability constraint by using Shell like technology to add subsurface fractures into deeper conventional geothermal systems. In closed loops or advanced geothermal, the only requirement is hot rock with no need for an external water source or permeable rock. Naturally, this opens up the resource potential exponentially.

Turning to Slide 14. You can see the typical characteristics for each geothermal development type. Much like the oil and gas industry use rapidly advancing technology to tap into unconventional and ultra-deepwater fields in the early 2000s, the geothermal industry is pushing technological boundaries that open new markets. Vallourec is ideally positioned from its expertise in shale development to serve enhanced geothermal market. Similarly, our unique vacuum insulated tubing solution is ideal for closed-loop system. This is not a fantastic. We are already serving customers across all of these product categories. Clearly, though the growth potential in next-generation solution, coupled with Vallourec's higher revenue opportunity per megawatt makes the growth in advanced and enhanced applications quite compelling.

As you may have seen, in January, we announced an exclusive partnership with XGS Energy to support their delivery of a 3 gigawatt pipeline of commercial advanced geothermal projects across the Western U.S. We hope this will be the first of many such fruitful relationships in this industry.

Now let's turn to our usual discussion on the OCTG market. I am on Slide 16, where we focus on the U.S. market. On the demand front, the horizontal oil rig count has been stable since mid-2025. Gas-directed drilling activity has increased through 2025 and into 2026. A wave of LNG project start-ups and growing domestic gas demand is supporting market expectations. Rigs drilling for gas now account for 1/4 of the total count, up from 17% a year ago.

Looking at the supply side, imports continued to decline for the fourth quarter following the administration's increase in Section 232 steel tariffs in June. Notably, we can see from the chart that the tariff has been more effective in curbing seamless imports compared to welded imports. On the right, seamless spot pricing has moderated slightly since the third quarter, though prices increased in both January and February alongside improving sentiment. Overall, we are encouraged by the improving supply side dynamics and the resilience of our customers' activity.

Let's move to the international OCTG market on Slide 17. Demand remained stable in international markets, but was somewhat subdued in 2025 compared to the beginning of 2024. We saw slower tender activity in the second half of 2025 that will cause us to start 2026 at a slower shipment cadence. In most of our core regions in the Middle East, Africa and Latin America, we have continued to perform well, in part due to our strong positions in high-value markets like unconventional gas and deepwater. Looking ahead, in the Middle East, we are seeing some signs of an activity acceleration, especially in markets with higher levels of unconventional activity for which we are supporting customers today with our high top premium connections.

Our premium portfolio often allows us to outperform the price indicators we show on the right side of this slide. That said, the latest outlook from Rystad does show an improvement in market pricing in January. I confirm that our average booking prices for international markets have remained at healthy levels due to our ongoing focus on value over volume.

I will now hand the call over to Nathalie to comment on our financial results.

Thank you, Philippe, and good morning, everyone. So let me now lead you through our key figures and results for Q4 and the full year 2025. So let's turn to Slide 19 to discuss our full year results and the key figures. As you can see, tube volumes were 1,244 kilotons for the full year 2025, so down slightly year-over-year with lower tubes volumes in South America and Eastern Hemisphere, not fully offset by stronger volumes in the U.S. The full year EBITDA was EUR 819 million versus EUR 832 million for the full year 2024. This slight decline includes a significant adverse foreign exchange impact of EUR 47 million. Tubes volume decline was more than offset by positive price/mix effect in tubes, stronger contribution from mine and forest and continued cost reduction initiatives, maintaining a strong 21% margin.

Net income was EUR 355 million versus EUR 452 million in 2024. Let's remember that 2024 was impacted by positive one-offs with the sale of the Rath site in Germany, generating a gain of sale of EUR 139 million and with our refinancing last year. Overall, we continue to build on our track record of generating consistent net income. Net cash ended the year at EUR 39 million, slightly higher than end of 2024 and after EUR 370 million having been returned to shareholders.

So moving to Slide 20, we can see that we continue to build on our track record in Q4. It has now been 13 quarters that the EBITDA margin has been around 20%, showing the strong resilience of the group, its ability to adjust costs and maintain a strong margin. Since 2022, we have been reducing our working capital requirements in number of days, as you can see on the top right. In Q4 2025, we further improved our working capital requirement with robust collections and inventory management. You can see on the bottom left that we have a track record of healthy positive total cash generation with EUR 177 million total cash generated in Q4 2025, which leads to positive cash at the end of the year, as you can see on the right.

Let's turn now to Slide 21 to start discussing our Q4 results and key figures. So revenues were EUR 1.043 billion, down 2% year-over-year, but again, impacted by negative currency effect of minus 6%. So revenues at constant foreign exchange rates are up 4%. Reduction in volumes sold were more than offset by improvement in price/mix and minor positive effect in Mine and Forest. EBITDA was EUR 214 million or 20.5% of revenues, stable compared to Q4 2024. Foreign exchange impact quarter-over-quarter is negative by EUR 10 million. So like for the full year, the positive price/mix effect in tubes across all regions as well as lower costs and cost savings did offset the impact of lower volumes, which I will comment in the next slide. Adjusted free cash flow in Q4 2025 was EUR 204 million to be compared to EUR 178 million in Q4 '24, which I will comment in more details later. And this led, as we saw to a net cash position, it's EUR 39 million achieved at the year-end.

We will now look at Tube performance in Q4 on Slide 22 and also 23. So looking at volumes, Page 22, you can see that volumes were stronger quarter-over-quarter as we guided. They were lower year-over-year, mainly due to our U.S. import business in the Gulf of America as expected and certain regions in Eastern Hemisphere. Average selling price was higher year-over-year as mix shifted more to international in Q4. Overall, Q4 Tubes revenue was 2% higher year-over-year and even 8% higher at constant foreign exchange. Revenue mix by geography that you see in the bottom left shows a reduction in North America contribution due to the decrease in imports versus Q4 2024, but also to a strong contribution from Middle East.

Slide 23, we can see the Tubes profitability. So Tubes EBITDA was EUR 183 million and 18% of revenue. So as you can see, our margin is very stable and resilient. Tubes EBITDA per tonne at EUR 548 increased by EUR 37 per tonne year-over-year and even EUR 65 if you consider constant foreign exchange rate, confirming again, the positive impact of our value over volume strategy. The decrease versus Q3 2024 EBITDA per tonne is due to a less favorable mix this quarter and a lower proportion of services.

So let's move now and look at the Mine and Forest performance on Slide 24. The production sold in Q4 '25 was close to 1.5 million tonnes, outperforming our expectations voiced during our Q3 call, leading to full year volume of 6.2 million tonnes. Mine and Forest EBITDA, as you can see on the right bottom, reached EUR 38 million and 48% of total revenue, increasing sequentially by 10%. This reflects higher iron ore market prices, partially offset by seasonally lower volumes. For the full year, EBITDA reached EUR 171 million, up significantly year-over-year, reflecting higher quality in ore after the start-up of the Phase 1 extension in late 2024.

So let's look now on Slide 25 at our net income key drivers and evolution. We continue to deliver a solid bottom line, as you can see on the right. In Q4, net income was EUR 96 million, that is 9% of total revenue, net income group share. You can see that Q4 2024 net result was higher at EUR 163 million. Again, as already explained, in 2024, the group net results had benefited from the one-off book gain on sale of the Rath site in Germany for EUR 139 million.

Looking on the left at Q4, you can see that -- and the bridge from EBITDA to net income group share, you can see that depreciation and amortization amount to minus EUR 52 million, very much in line with previous quarters and Q4. Financial result is minus EUR 16 million. In the other pillar of the bridge includes restructuring and some one-off impacts such as in the quarter, a positive reversal of impairment of assets in China for plus EUR 38 million, reflecting the good operational performance and evolution of China. Income tax is minus EUR 35 million. Effective tax rate was 26% in Q4 2025.

Let's look now at cash flow analysis on Slide 26. We can see how we convert EBITDA into cash flow for the quarter and for the full year. We had excellent total cash generation in Q4 of EUR 177 million, resulting in over 80% conversion of EBITDA to cash, thanks to robust collection and inventory management, driving the change in working capital that you see on the left. CapEx was minus EUR 55 million, a bit elevated versus prior quarters as work continues on our growth projects. And as you can see on the right, we did remain within the EUR 150 million to EUR 200 million range as disclosed in our CMD in the full year 2025 with total CapEx for the year of EUR 176 million. So for the full year '25, we delivered over EUR 400 million of total cash generation for the third straight year with restructuring costs halving year-over-year and continued structural improvement in our working capital as we optimize our operations.

And in the last slide, let's look at our debt and liquidity. So thanks to the excellent net cash generation I just commented, we turned net cash positive in Q4 with plus EUR 39 million on the balance sheet -- of cash on the balance sheet at the end of the year. As you can see on the right, we have significant liquidity above EUR 1.6 billion, of which nearly EUR 1 billion in cash.

Thank you, Nathalie. Let's turn to Slide 29 to discuss our outlook. Starting with our tubes business. In the first quarter, we expect volumes to decrease sequentially. EBITDA per tonne should remain similar to the fourth quarter level. For the full year, we expect our North America tubes business to see sustained strength in volume, thanks to market share gains during 2025. We expect a slight near-term decrease in U.S. market prices with improving industry supply-demand conditions, setting the stage for potential improvement later in the year. In our international tubes business, we expect lower sales volume in H1 2026 due to slower booking in H2 2025. We see activity recovery in the key Middle Eastern markets, setting the stage for higher second half volumes. We expect market pricing to remain broadly stable versus the second half of 2025 with discrete customer contracts driving selective price upside.

For Mine and Forest, we expect production sold to be around 1.4 million tonnes in the first quarter. We expect full year production of around 5.5 million tonnes, slightly lower year-over-year due to an improved production process focusing on value over volume. At the group level, we expect our first quarter EBITDA to range between EUR 165 million and EUR 195 million.

Let's conclude on Slide 30. We are driving further improvement in return on capital through a relentless push towards operational excellence and asset streamlining. We are positioning for future profitable growth through targeted research and development and capital investments to solve the energy challenges of today and tomorrow. Finally, we are delivering on our commitments to shareholders, targeting a substantial EUR 650 million in shareholder returns in the first 8 months of 2026 while maintaining our crisis-proof balance sheet.

Thank you again for your attention. Nathalie and I are now ready to take your questions.

[Operator Instructions]

We have a question from Paul Redman from BNP Paribas.

I just wanted to ask 2 questions. Firstly, was about the buyback and the distributions. And you've guided EUR 650 million of payout to shareholder in 2026. I just wanted to ask about the allocation and why you've allocated the -- well, additional cash to dividend rather than to buyback to kind of offset some of the dilution impact of the warrants in 2026? And then my second question was on working capital. You've had a big release this quarter. I want to go into a little bit more detail on what the drivers of that is. And also, how do we think about working capital into 2026?

Okay. First, I will take your first question. As you know, we have launched a share buyback plan for EUR 200 million to be executed by end of June. But given the daily volume credit and obviously, how we can execute share buyback, I think we were a bit capped -- and that's why we only allocated EUR 200 million out of the EUR 650 million to share buyback. Remaining being, as you have seen, the sum of the proceeds of the share buyback -- of the warrants and what was not used for the share buyback from the total cash generation of '25.

Second, on the return on capital employed and working cap, you clearly understood that since I joined, my main focus was on deleveraging the balance sheet of Vallourec, and we reached the zero net debt end of '24. And again, end of '25, we have a positive net cash of EUR 39 million but the levers we have used to achieve such performance was obviously to work on every aspect of our capital employed, starting with the working cap. And by the way, there is a nice slide in Nathalie's presentation, where you can see that our working cap in days of sales continue to decrease, and we still see further room for further improvement.

And on our asset base, as I have mentioned in my presentation, we continue to question and challenge any asset we have in Vallourec, which is not absolutely needed to generate, obviously, the performance we are contemplating.

We have a question from Matt Smith from BofA.

I wanted to start on the mine, if I could. You talked to a new strategy, sort of value over volume there. I wonder if you could give us any update in terms of where you might put new guidance perhaps for annual EBITDA for that business versus what you've presented in the past? What is the net-net of that strategy? And I suppose a follow-up would be, does that have any implications for future mine expansion plans that you've talked to before, please? That would be the first one.

And then the second one would be -- thank you for the updates as ever around the U.S. sort of OCTG market. I can see those seamless imports coming down. I think the one sort of topic that scratch my head out a bit is domestic supply in the U.S. There was actually a source of a lot of supply growth in 2025, which doesn't seem to get much airtime. And I just wondered if you could talk to the drivers of increased supply, domestic production in '25. And if you saw the picture any differently for '26, your insights there would be really appreciated.

Okay. Thank you. So let's start with the mine. First, we are very consistent with what we said in September 2023 about what we expect from the mine. You remember, Phase 1, now fully executed around EUR 100 million EBITDA. Phase 2 completed EUR 125 million. So there is no deviation versus what we said in 2023. What has changed in the meantime is that we have applied our recipe for success, value over volume to the mine too. So today, we extract less [ ROM, ] but we are able to generate -- to produce more iron ore, more high-quality iron ore and obviously, the EBITDA we are looking for. So that's the logic behind this. So again, I insist no change versus what we said in September '23 about what we expect from the mine.

As far as the U.S. -- OCTG U.S. market is concerned, several -- yes, first, imports have declined since the implementation of the 232 import tariff, which obviously led customers to buy more from domestic capacity. So in fact, First effect is a better use of existing domestic capacity, starting with ours. And as I said, we have nice volumes, and we are well loaded with our capacity today. On top, what we see is a better sentiment and as you have seen, Pipe Logic slightly going up in Jan, in Feb again, which obviously give us confidence that at some point, the balance between supply and demand will translate into upward pressure on prices. And this is likely to obviously happen in '26.

On top, as we mentioned, we have invested in additional capacity to produce high-torque connection for unconventional drilling. That's a change in the market. And the market is becoming more premium. As you have seen, our customers are able to produce as much oil with less rigs, less wells, thanks to this technology. Obviously, there is a real appetite for this technology that we have developed and for which we have gained market share. And obviously, we intend to continue to gain market share.

[Operator Instructions]

We have a question from Kevin Roger from Kepler Cheuvreux.

I have 2, if I may. The first one is maybe to understand a bit more the Q1 guidance because at the time of the Q3 earnings, we were mentioning some shift in volumes from Q4 '25 to H1 '26. So I was wondering if the lower volumes that you mentioned for Q1 means that those volume has been shifting to Q2 and maybe to understand a bit more the implication that we saw between the 2 quarters. And the second one, you talked about the geothermal activities during the presentation quite a lot. And recently, you signed a deal with XGS. When we make some math with the elements that you shared with us, this framework agreement could represent quite a lot of revenue, maybe something like EUR 1.5 billion. So I was wondering if you can share a bit with us how you do see this XGS partnership impacting the revenue for Vallourec in '26, '27 and '28, please?

Yes. Going back to Q1 volume being lower than Q4, I remind you that our volume in Q4 were much higher than Q3. So obviously, this has to be put in perspective. When oil price started to go down, we have seen last year in H2 customers not canceling investment plans, but taking more time to decide on their investment and placing orders. And that's what's reflected in our bookings and will translate in H1 in our invoicing. But again, as I said, we see clear pickup since the beginning of the year as, by the way, oil price went up $10 since. So that's why I think the profile of this year volume-wise is likely to be similar to the one of '25. As far as geothermal is concerned, thank you for noticing, obviously, to bouncing back on what we said on geothermal. It's a new market which is opening.

And again, 3 years ago, obviously, we had -- we decided to obviously invest time and money on research and development on new application for our know-how. And this geothermal and advanced technology was the right bet. And yes, today, and again thanks to the data centers, which are popping everywhere and the huge need for baseload electricity, this technology now have obviously a good prospect. And as I said, there is more project in the pipeline than the existing installed base, and we are positioned on it. We mentioned about XGS for which we provide unique technology with -- we are the only one able to provide the famous VIT technology, vacuum insulated tubes. And when you do the math, yes, I think your conclusion is the right one. I think these wells because geothermal is based on wells require technologies, premium technology we have. And obviously, this will come on top of our technologies to support our customers on unconventional, more gas-directed production.

But sorry, if I may follow up, how would you, in a way, see the phasing? Would you consider that those opportunities will mostly materialize in '28 because those guys needs to get a lot of financing? Or you do see already a lot of stuff in '27, for example, or even sooner?

Data centers need electricity now and in the next few years. So there is no time to wait and geothermal project can be executed as fast as they can drill. So it's already today. And obviously, it will ramp up nicely over the next years, but it's not something for the future. It's already something for projects which are currently in execution phase.

[Operator Instructions]

We have a question from Baptiste Lebacq from ODDO BHF.

Two questions from my side. First one is, if I look at your slide, Page 11, I see you still have, let's say, a quite tense investment program for 2026. Does it mean that in terms of CapEx, we should be in the upper range of your, let's say, CapEx guidance that you gave into 2025? And second question is on the geothermal market versus hydrogen market. It seems that you are more bullish right now on geothermal than, let's say, on hydrogen market. What is your view on the hydrogen market? Is it, let's say, the next wave after geothermal in terms of sequence for you?

Yes. As far as CapEx is concerned, yes, we gave you on Page 11, a sense of what we have been doing since 2022. Many projects, obviously, are in execution phase in '26. But nevertheless, we will be within the envelope we shared with you between EUR 150 million to EUR 200 million. So no risk to go beyond what we said. So we stay obviously very disciplined on our capital allocation. The good news is that, obviously, the return on investment of all these projects is fairly consistent with our will to increase over time our return on capital employed. As far as hydrogen and geothermal is concerned, it's true that 3 years ago, nobody was talking about Gen AI. Nobody was talking about data centers, hyperscale. Today, that's a fact.

There is a lot of investment. There is need for basal electricity and geothermal is one of the solution to provide these huge quantities of basal electricity. So it's clear that it's come now faster than hydrogen and green hydrogen. Nevertheless, on green hydrogen, we are in talks with many customers whose projects are in the FEED phase, so engineering phase, which sooner or later will reach the FID stage, investment decision stage. So that's something to come that will come on top. And as you remember, our Delphy storage solution is the only one available today to store between 1 and 100 tonnes of hydrogen. So more to come. And as you remember, we have decided to manage this business as a turnkey business. So obviously, it could be a nice addition to our revenue and profitability in the future, and it's fully part of our 5-year plan.

Now we have a question from Julien Thomas from TPICAP.

I have 2, please. The first one would be about maybe your take on your German partners' agreement regarding HKM JVs. Do you have something to share with us or something like that? And the second question about your improvement in EBITDA per tonne. Could you give us what come from downstream investment versus, let's say, historical restructuring of existing capacities?

Well, first on HKM, yes, yes, the agreement between thyssenkrupp and Salzgitter opened the door for us as thyssenkrupp will do to sell our shares to Salzgitter and terminate our shareholding of HKM. Obviously, there will be -- we'll have to provision for all the work Salzgitter will have to do when they will be. But this is fully already covered by our balance sheet provision. So I think we are -- there is -- I think it's -- for us, it's a good news. I think thyssenkrupp and Salzgitter have reached this agreement and that now we can execute this transaction. As far as the EBITDA per tonne is concerned, EBITDA is a result of obviously, average selling price, which is driven by our value over volume strategy. You remember, when I joined Vallourec volume were 1.850 million tonnes. We are now slightly above 1.2 million tonnes.

So drastic change with the past, but average selling price has significantly increased. And EBITDA per tonne is a consequence of cost. And we have worked a lot in the last few years, and we continue to do so to continue to lower our cost structure and ensure it's a very highly flexible industrial footprint. So whatever the volume, we protect our margin, thanks to our ability to flex cost whenever we need it to adapt to the sequence of bookings and the cycle of this industry. So that's why we are able to -- we have been able to close the gap with our primary peer on EBITDA per tonne. And you've seen the data on the slide showed earlier. And we will obviously continue to do so, and we have projects in order to continue to improve on that front.

We have a question from Mike Pickup from Barclays Capital.

It's Mike here from Barclays. Just a quick one. You talked about the international business improving in the second half. Is there anything significant that we should be keeping an eye on something like the big Kuwait orders? Or is it just a general pickup across the regions?

Well, first, 2 things. One, when barrel of Brent is going up USD 10, it's clear that there is an incentive for our customers to go a bit faster on executing their plans. Second, what we see is that there are major unconventional oil field opening, which require many wells using our technologies, starting with iDRAC. So that's something which seems to pick up significantly since the beginning of the year. And we may -- yes, you -- we may communicate more widely in the future.

We have a question from Paul Redman from BNP Paribas.

Am I able to ask one more?

Yes.

I just want to touch on Venezuela quickly. One of your peers spoke in length about opportunity in Venezuela. I kind of wanted to ask about your position in the country and whether this is a market you think you'll be able to sell volumes into in the relatively near future.

So we used to sell to Venezuela years ago. What has changed in the meantime is now thanks to all the investment we did in Brazil, we are able to make the pipe which are needed for Venezuela in Brazil. So obviously, much closer than it was in the past coming from Germany. The onshore oilfield in Brazil are sour. So you need sour service pipes, which we make and which are obviously very premium pipes. So from a product standpoint, I think we are uniquely positioned. And on top, as you know, given our strong presence in the U.S., we are the #2 player on onshore business in the U.S. We have close relationship with the U.S. customers. So today, we have a task force, which is a mix of our U.S. sales team and Brazilian production team in order to seize any opportunities that may come in Venezuela. So more to come, will depend, obviously, how fast our customers go forward with their project.

We have a question from Jean-Luc Romain from CIC CIB.

My question also relates to geothermal. You mentioned rightfully that the product you will deliver is very specific with kind of pipe in pipe also. What's the limiting -- do you have a limiting factor which will be the capacity to produce those pipes in terms of your growth in sales? Or do you have a strong capacity to do this?

We have available capacity. VIT is a process in itself because we need to weld pipe inside another pipe. So that's a specific industrial setup that we have and for which we have capacity available. So no, obviously, it's clear that if we double our volume, thanks to this new market, at some point, we will reach our capacity limit, but it's not yet the case. And anyway, it's good to know that whatever to be on more than one market and obviously, to mitigate any up and downs on any market, there is the one oil and gas.

Understood. And from what you said, the EBITDA associated to the growth in geothermal could rapidly become in the tens of millions? Or could it be maybe at a later stage in the hundreds of millions.

In 2022, I said that we were expecting between -- maybe in 2023, that we were expecting between 10% and 15% of our group EBITDA coming from this new energy applications. So it's fully part of it. It's fully part of it. And obviously, we are very strict with our value over volume strategy, and I can guarantee you that it will not be dilutive to our EBITDA per tonne.

There are no more questions at this time. So I hand the conference back to the speakers for any closing comments.

Thank you. Thank you all. I'm very pleased to be in the position we are today. Vallourec is a fully transformed company, evidenced clearly by our investment-grade balance sheet and the robust returns we are delivering to our shareholders again in 2026. Meanwhile, we continue to see opportunities as we drive operational excellence across our organization and position for profitable growth. We are well positioned to serve the energy challenges of today and tomorrow. Operator, you may end the call.

Good morning, and welcome to Vallourec's Q3 2025 presentation hosted by Philippe Guillemot, Chairman of the Board and Chief Executive Officer; and Sascha Bibert, Chief Financial Officer. [Operator Instructions].

And now I would like to hand the call over to Connor Lynagh, Vice President of Investor Relations. Please go ahead, sir.

Thank you. Good morning, ladies and gentlemen, and thank you for joining us for Vallourec's Third Quarter 2025 Results Presentation. I'm Connor Lynagh, Vice President of Investor Relations at Vallourec. I'm joined today by Vallourec's Chairman and Chief Executive Officer, Philippe Guillemot; and Vallourec's Chief Financial Officer, Sascha Bibert.

Before we begin our presentation, I would like to note that this conference call will be recorded. A replay will be available following the call. You can find the audio webcast on our Investor Relations website. The presentation slides referred to during this call are also available for download here.

Today's call will contain forward-looking statements. Future results may differ materially from statements or projections made on today's call. The forward-looking statements and risk factors that could affect those statements are referenced on Slide 2 of today's presentation. These are also included in our universal registration document filed with the French Financial Market regulator, the AMF. This presentation will be followed by a Q&A session.

I will now turn the call over to Philippe Guillemot.

Thank you, Connor. Welcome, ladies and gentlemen, and thank you for joining us to discuss Vallourec's third quarter 2025 results. In the third quarter, we delivered solid results once again with group EBITDA margin rising to 23%, the highest level since the first quarter of 2024. With this, we have now maintained our EBITDA margin around the 20% level and generated positive cash flow every quarter for the last 3 years.

Our strategic initiatives are paying off, demonstrated this quarter by the closing of the Tubes profitability gap versus our primary peer. You can see today's agenda on Slide 3. I will move to Slide 5 to discuss the highlights of the third quarter. Our third quarter results were in line with our expectations. EBITDA of EUR 210 million was at the midpoint of our guidance range.

We recorded very strong net income of EUR 134 million. Our net income has recently been added by the execution of strategic projects, in this case, the sale of Serimax. Group EBITDA margin was 23%, driven by the robust performance in Tubes. Tubes EBITDA per tonne improved by more than 25% sequentially to EUR 621 Total cash generation was positive for the 12th straight quarter. We reduced net debt to EUR 140 million.

Looking ahead, we expect fourth quarter EBITDA to range between EUR 195 million and EUR 225 million. Our full year outlook confirms the expected second half versus first half EBITDA improvement. We have seen some positive trends in the business despite a volatile macro environment. In the U.S., our fully integrated domestic operation is benefiting from high levels of customer demand. Recent bookings have been strong.

In Brazil, we secured a major contract with Petrobras, which will expand our OCTG market share. This contract further demonstrates Vallourec's ability to deliver high-value solutions from our domestic manufacturing base. Meanwhile, in select markets in the Eastern Hemisphere, we have seen delays in some customers' activity. These delays will result in some orders being invoiced in 2026 later than initially planned.

This delay is embedded in our fourth quarter outlook. Turning to capital allocation. We further optimized our capital structure in the quarter, redeeming 10% of our 2032 senior notes. In addition, today, we announced a special meeting for holders of Vallourec warrants. The key proposal will be to allow Vallourec to satisfy its warrants obligation with existing or new shares.

The current terms of our agreement only allows the delivery of new shares. This will enable maximum flexibility in our capital return options over the next year. Let's move to Slide 6. The 2 goals of the new Vallourec plan were to crisis-proof our business and deliver best-in-class profitability.

Today, I am pleased to announce that Vallourec has achieved another major milestone. In the third quarter, we fully closed the margin gap versus our primary peer. This is thanks to our core principle of value over volume and our relentless focus on operational excellence. We also continued our strong trend in return on invested capital in Q3.

I assure that our journey will not stop here. We have many initiatives underway to further improve our return on invested capital. Let's turn to the current market environment on Slide 8. We start here with the U.S. OCTG market. While crude prices remain volatile, oil drilling activity bottomed in August. The oil rig count increased modestly through the third quarter.

Gas directed drilling has stabilized at a healthier level after rebounding in H1. Recent strength in U.S. gas pricing could drive higher activity. OCTG consumption per rig is also a tailwind. Since 2015, OCTG intensity per rig has increased nearly 5% per year, as shown on the right-hand chart. The drivers are clear. Our customers are drilling longer laterals and rigs are drilling at faster rates.

The push towards long laterals has driven strong demand for our high-torque connections. Because of this, one of our return-enhancing initiatives is the construction of our new training line in Ohio, which we announced earlier this week. This line will serve the strong and increasing market demand for high-torque connections with a high return on capital.

Let's move to Slide 9. On the left side, you can see the import trend. While recent data is unavailable due to the U.S. government shutdown, we believe imports have started to decrease. This is particularly true for seamless products. Our order intake has been robust in recent months, reflecting healthy demand level and an improvement in our market share.

This is likely at the expense of some of these imports. Seamless spot pricing was stable in Q3 with the latest survey showing a slight increase. We have seen divergence in welded versus seamless pricing in some recent industry surveys. This validates the differences in import economics we highlighted last quarter.

Let's move to the international OCTG market on Slide 10. Demand, as measured by the rig count remains at a healthy level in most regions. On the left, we highlight that activity trends have not been uniform across key geographies. Middle East activity, particularly offshore, has shown a downward trend over the past several months. This was particularly driven by activity reduction in Saudi Arabia.

Our premium portfolio is outperforming the overall market. Still, we have seen some delays in customer activity in select countries, especially in the Middle East and North America region. Meanwhile, activity in other international markets has moderated very slightly. Many of our core markets, such as Brazil, have been stable and look set for further growth.

Market prices according to Rystad Energy are consistent with the change in activity. There has been softening in the Middle East relative to offshore markets like North Sea. Our product mix is skewed toward more premium grades and connection that is indexed. Our pricing has remained more stable, including in the Middle East.

Looking at the long term, our key international customers continue to advance ambitious capacity growth plans. This will inevitably lead to higher drilling activity and higher OCTG demand well into the future. The structural shift towards increased gas and unconventional fields and the resilient development of deepwater basins is a tailwind. These resources require high-tech solutions, including new fit-for-purpose solution that we are developing today.

Before I hand over to Sascha for his last participation to Vallourec's analyst call, I would like to warmly thank him for his contribution next to me to the successful execution of the new Vallourec plan, which I announced in May 2022 and that Sascha will recap in his presentation. We all wish him the best for his future challenge in Germany.

Good morning, everyone. Thank you, Philippe. Yes, I'm leaving with a lot of gratitude and also some pride when looking back on what we have achieved as a team. Under your leadership, Philippe, we have executed the new Vallourec plan, including the closure of plants and implemented a change in the business mix towards high value-add products, which allowed us to generate cash consistently.

This opened the door for the refinancing and the initiation of shareholder returns. Meanwhile, our shareholder base has transitioned from Apollo and SVP Global towards ArcelorMittal and many global investment funds. Similarly, we have established a new banking group and are now fully transitioning towards an investment-grade balance sheet. In short, the chapter has closed and a new one is opening.

The Vallourec team will go towards the next level of efficiency, continuing to further optimize our return on capital. This will offer new opportunities, but will also benefit from new skills and fresh energy. I will join the BASF Group to support them with the carve-out and IPO readiness of the Agricultural Solutions business. It was a fantastic journey with Vallourec, and I thank you all for your support during those years.

Let me also highlight important changes in our Investor Relations team. Connor will continue to lead the team until early '26. however, then transition the IR leadership to Daniel Thomson, who recently joined us from Exane BNP Paribas. I think many of you know Dan. Sometime in H1 2026, Connor will then fully concentrate on his new responsibility as Finance Head for our North American operations. Furthermore, we have another addition to the IR team, Igor Le Blan, who brings with him lots of valuable experience from his former Vallourec roles, including for sales in Northern Africa. Let's start with Page 12. This slide shows the impact of the new Vallourec plan. As part of our premiumization strategy, we have changed the business mix and increased prices.

We also worked hard on our cost, reducing fixed costs and thereby increasing our resilience to market cycles. The combination of higher prices and higher efficiencies have contributed to an EBITDA margin that is now consistently around 20% for the last 3 years. We additionally focused on the bottom line, both in the P&L and manage for cash. With diligent working capital management, we have improved contractual payment terms with our suppliers, focused on the cash profile of our customer contracts and are continuously optimizing our inventory levels.

This has led to a balance sheet with basically 0 net debt and ample liquidity, giving us the flexibility to operate successfully in any market environment and allowing for attractive shareholder returns. On Page 13, you have the group KPIs. Q3 was another quarter that added to the execution track record I just referred to. Our EBITDA came in right at the midpoint of our guidance, though again, we had some foreign exchange headwinds.

Let's look at our Tubes segment on Page 14. Tubes volumes increased sequentially and so did the average selling price. We have recently recorded some important customer wins, for example, in Brazil. The new LTA with Petrobras will lead to revenues starting in H2 '26 and then fully from '27 onwards. Tube's profitability is shown on Page 15. In line with our value over volume strategy, based upon a clear selection of where to play while making use of our premium capacity, we also increased profitability in the Tube segment to one of the highest levels in recent quarters.

As Philippe outlined, we are now also closing the margin gap with best-in-class peers, though there are many more performance initiatives to come. Over to Page 16. Mine & Forest earnings reduced sequentially, but are still higher than the normal run rate we have guided at our Capital Market Day. Volumes were slightly down sequentially, while the quality of the ore sold remained high. As expected, cost went up slightly, though still leading to an attractive EBITDA margin for the segment of more than 40%.

Moving to net income on Page 17. Net income was strong, additionally supported by a capital gain recorded as part of the Serimax disposal and a favorable tax rate. Looking at the right side of the chart, Vallourec has clearly moved away from being a company with a predominant capacity and top line focus towards managing for the bottom line, both in the P&L and in cash.

Page 18 shows our cash flow. Total cash generation came in at EUR 67 million despite of a EUR 43 million increase in working capital. Restructuring charges and asset disposals offset each other in the quarter following the disposal of Serimax. Cash conversion was once again high.

Page 19. In line with positive cash generation, net debt improved and also gross debt came down following the repurchase of 10% of our outstanding bonds. The reduction in gross debt will continue in the next quarter as accrued interest will then reduce subsequent to the payment of the coupon.

Philippe, back to you.

Thank you, Sascha. Let's turn to Slide 21 to discuss our outlook. Starting with our tubes business. In the fourth quarter, we expect volumes to increase slightly sequentially. EBITDA per tonne should remain similar to Q3. For Mine & Forest, we expect production sold to be around 1.4 million tonnes in the fourth quarter. The sequential decline is in line with typical seasonal patterns.

We expect full year production of around 6.2 million tonnes. EBITDA in the Mine & Forest segment will be contingent on market prices for iron ore. That said, we have hedged a portion of our production, so our results will not be fully exposed to further price developments from here. At the group level, we expect our fourth quarter EBITDA to range between EUR 195 million and EUR 225 million.

Looking at the full year, we confirm our prior year guidance for EBITDA improvement in the second half. Based on our Q4 outlook, full year EBITDA is expected to range between EUR 799 million and EUR 829 million. Let's conclude on Slide 22. We remain focused on improving our profitability and return on invested capital as we drive Vallourec towards operational excellence.

We were very pleased to close the profitability gap versus our priority in the third quarter, but we will not stop there. Our vertically integrated U.S. footprint is paying dividend with customer demand remaining strong. Finally, we strive to be one of the most shareholder-friendly companies within our peer group. Today, we announced a key step to improve flexibility in our shareholder returns.

By allowing our warrants to be satisfied with existing shares, including treasury shares, we can approach our shareholder return in 2026 in a more holistic way.

Thank you again for your attention. Sascha and I are now ready to take your questions.

[Operator Instructions] Now we have a question from Matt Smith from Bank of America.

A couple, please, both reflecting on some of the prepared remarks. So I mean the first one would be around the international business. You commented on some delays to customer activity, sort of orders from 4Q into '26. I guess I just wondered if your confidence level that this is sort of simply order deferrals.

I guess you already have visibility on that, but perhaps that sort of leads into some wider comments on the international business for '26 might be useful if you could, and you could talk to the visibility that you already have there from the order book. I think that would be useful.

And then secondly, coming back to the warrants that proposed in those modifications to the terms today. I just wondered if you could talk to sort of the intention and what you would see as the sort of ideal outcome and resolution from all of this, please?

Okay. Thank you for the question. Well, first, as you know, our long-term agreement with customers do not have quarterly volumes commitment. So we make an estimate of our activity levels in certain countries has been -- activities has been slower than forecast. In addition, customers have some control over when we deliver and invoice orders. So we have some highly contributed orders that push out of the year.

So it's just a question of time. We have these orders. It's just a question of when customers will need the pipe so we can invoice them. And that's why what we don't invoice as expected in Q4 will be invoiced somewhere in 2026. Overall, about the market we are in, I think we are confident. I think our customers have capacity increase plan they are executing.

And so far, we have no reason to think they won't do so, especially as you have seen that OPEC+ is ramping up production. So that's for your first question. As far as the second one is question, as we indicated, as I indicated, we want maximum flexibility in our return to shareholder.

And with the change of terms of the agreement with the warrants orders, I think we will open the door, obviously, to potentially buy shares in order to have treasury shares that could be used at the time warrants will be exercised and not only to use new shares.

Now we have a question from Guilherme Levy from Morgan Stanley.

Sascha, wish you, of course, all the best in your next steps. I have 2 questions, please. The first one, if I may, you commented on your perception of lower imports into the U.S. recently. So I was just curious to see how quickly you think that inventory levels can fall in order for you to see a more significant increase in terms of prices and margins on the back of the recent import tariffs in the country?

And then the second one, thinking about this new investment in the dredging line in Ohio, could you perhaps share with us more examples of small-scale investments that you have in mind that you could make over the coming quarters? And how should we see your maintenance CapEx and also your total CapEx, including these small initiatives over the coming years?

So yes, what we start to see is the impact of the tariff on the U.S. imports as even though there is no statistic available, it looks like imports are decreasing. By the way, one of the European player who used to sell to the U.S. has announced yesterday that they will go from 3 shifts to 2 shifts, so lower volume, which is a first clear indication that importing pipes in the U.S. given the tariff may not be as viable as in the past or as profitable as in the past.

So this, as a consequence, favor domestic players. And I remind you that 100% of what we sell on the onshore market in the U.S., we make it in the U.S. from steelmaking to finishing that we are the second player on the seamless pipe OCTG business in the U.S. So as far as inventory is concerned, yes, they were up because of the imports in anticipation of the tariff, but now they are obviously slowly but surely depleted.

And we think that we will see even more of this happening in 2026. That's the reason why, as I said, we see strong demand for our product and premium product, as I mentioned earlier. Trading line. So the trading line investment in the U.S., USD 48 million, we announced on Monday, and we had, by the way, a groundbreaking ceremony in Ohio to do so is a clear illustration of what we are doing First, value over volume.

Here, we are talking about increasing capacity to deliver high connection to help our customers to generate productivity gains. So we are really at the heart of their success. Second, we invest with, obviously, a state-of-the-art line. But I can guarantee you that this is a good example of an investment that will further improve our return on invested capital.

As far as CapEx is concerned, we stay very disciplined. And what we have in mind doesn't mean that we are going to increase CapEx envelope in the next few years. I think we are in the EUR 200 million range, and we have no intent to exceed this amount. By the way, talking about return on invested capital, which is a key metric we are focused on, and we will be even more focused in the next few years.

Another example is our investment in Thermotite do Brasil, the thermo insulation business in Brazil. We more than doubled the value we can sell to customers. And I can already tell you that this acquisition, this new plant is already fully loaded for next year to thermization, to thermal insulate Vallourec pipes. So another good example of the investments we are making to further improve our return on invested capital.

Just adding one addition to what Philippe said on CapEx. for the current financial year, looking at what we have spent at the 9-month stage and acknowledging there's only the fourth quarter left, I think we will come out quite a bit below the EUR 200 million, i.e., in the Capital Market Day, we have mentioned maybe a long-term average of EUR 175 million. I think we'll be closer to that in this fiscal year. And thanks for your wishes, Guilherme.

Now we have a question from Kevin Roger Kepler Cheuvreux.

And first of all, Sascha, well done for everything that has been done in terms of financial, but also in terms of communication, frankly, it has been very appreciated by anyone. So good luck also for the next journey, wishing the best. The first question, if I may, just going back on the shifting of the volumes from Q4 to 2026.

I was wondering if you can provide a bit of magnitude the impact on Q4 in terms of volumes. Making some math, I'm finding that maybe we are thinking about 30,000 tonnes of tubes that will be missed in Q4 compared to the previous expectations. So maybe some words around that, please? And the second one, sorry for this stupid accounting tax question. But implicitly with the new mechanism on the variant, you are telling us that potentially you would buy back some shares.

In the current French tax environment that is evolving every day, can you just try to summarize and of course, I understand that it will be subject to what we have in terms of budget in the coming weeks, but what it would imply for the tax payment on any buyback for you, notably related to difference between the cash payment and the book value, et cetera, please?

So going back to Q4 volume and invoicing. First, I remind you that we will invoice more in Q4 than Q3. And I won't give you any indication of how much we could have invoiced had customers ask to be delivered as we forecasted. And again, it's only a forecast. And every quarter, we have to forecast what customers will ask for. But again, I'm talking about orders we have.

As far as warrants are concerned and tax treatment, I remind you that the tax in France is such on share buyback is such that if we don't cancel the shares, so we use them. And as an example, we can use them for management incentive plan. We -- they are not tax -- so we are immune to this. And as far as the amendments that have been voted at the parliament, what I understand is that it's not likely to be in the final budget as it is totally incompatible with European laws and other regulations.

Now we have a question from Guillaume Delaby from Bernstein.

Thank you, Sascha, for all your help over the past few years, especially if I remember between Christmas and New Year Eve a few years ago. Three questions, if I may. The first one is the -- two first ones, in fact, are for Philippe. So I've been impressed by your average selling price, which is up 8% sequentially, while globally OCTG prices have still remained flattish. We didn't have yet an increase in OCTG prices.

So what has been your secret sauce during Q3? Is it a question of mix, more connection? If you can elaborate a little bit? That's my first question. My second question is on your 2026 outlook. Many services companies have provided a much more constructive 2026 outlook at the Q3 that what could have been expected. So just curious to see what is your -- whether or not your view on 2026 has evolved.

You mentioned probably more drilling at some stage. And the third question is about the warrants. Sorry to be long, just to fully understand. So basically, what is going to happen? So the warrants are going to be exercised. So you are going to get some cash with additional shares. Am I understanding correctly? Or if not, please correct me.

Okay. So our secret sauce, but now I think you start to see it in the numbers, value over volume. We are very serious about it. What we sell is high value-added products, which obviously give us some pricing power. And again, we don't only sell tubes. We sell solutions. We sell tubes and service associated. So this is a combination of all this.

And as I've said since I joined, our focus is to develop the right portfolio of customers and markets that are in need of these high value-added products. So yes, definitely, what we sell, and that's what I mentioned when we compare our average selling price to the Hat index, nothing to compare. We are much more stable than what you see on that chart. So it's just an evidence that the strategy and the change of strategy I made when I joined is working. '26, I won't guide for '26. But as I said, U.S. market is good.

We see demand -- very strong demand month after month. And so far, no reason to think it won't continue that way. And as far as drilling activity is concerned with some international customers or you see that Petrobras is obviously very active. They're even talking about exploration of the Amazonian area.

And in Middle East, I think Aramco has seen some decrease in their rig count, but it may increase next year again. So again, so far, I think demand is still there for our high premium solutions. As far as -- so warrants, the question was...

Yes. Guillaume, your principal understanding is correct. Provided that the conditions are satisfied in the summer of '26, the warrants will convert, and this will lead to a capital inflow to the tune of EUR 300 million and a bit to Vallourec. There is no change to that.

The change, if any, that we have announced today is that we want to create flexibility in how we serve the warrant holders with shares. The existing documentation allows us to create new shares and new shares only, while after the approval from the warrant holders, we would then also have the opportunity to deliver existing shares.

So again, we stick to our return policy. We said we would return to shareholders between 80% and 100% of the total cash generation of the year before. So as you have noticed, we have year-to-date generated cash and obviously, even more at the end of the year. So all this cash is available and obviously, it is supposed to be returned to shareholders within our policy.

So with the warrant agreement terms change, we have the flexibility to use existing shares once warrants will be exercised at the latest end of June next year. And obviously, we may decide to buy back shares in order to have them available in due time.

Philippe, when it comes to the secret sauce, maybe you also want to just remind people about the current stage of our North American onshore business, which I think is also doing quite well and added to the ASP development that we have seen.

Yes. On the U.S. market, as you see and when we announced the investment on the [ ITO ] connection, it means that, yes, the mix we are selling in North America is more high value-added than it used to be. And as a consequence, lead to higher average selling price, too. So what we see -- what you see on the overall group average selling price is true in all regions.

And same thing for Petrobras. The long-term agreement we have signed with Petrobras that will start to fall in our numbers in the second half of '26 is obviously with mix of products of high value added, including larger diameter, 18-inch and above that we, in the past, were not able to produce in Brazil, but now we are able to produce in Brazil, thanks to the investment, which were part of the new plan.

Maybe just a follow-up on the warrant. It means that practically, you are likely or you have the option or the flexibility to buy back and to reduce some of the dilution which will be caused by warrants. Am I correct?

You are correct. If all warrants are exercised and we deliver only new shares, it's roughly 15% dilution. So if we buy back shares and we use existing shares, obviously, we will reduce the dilution. And that's obviously the option we want to have.

Now we have a question from Paul Redman from BNP Paribas.

I just wanted to delve a little bit down into the shareholder distributions for next year. So you've been paying out dividends for the past couple of years as part of the 80% to 90% -- 80% to 100%, sorry, of total cash generation paid out to shareholders. Is this new buyback possibility part of that 80% to 100%? Or does it go beyond it?

And if it's part of the 80% to 100%, do you have a minimum level of dividend you would like to guide us towards and the rest possibly coming through buybacks? And then Sascha, I just wanted to ask you, you've been at the company and the company has changed a lot over the past few years. I wanted to ask, have you got any key highlights that you can say have been your biggest successes over the past few years?

So before I hand over to Sascha, Yes, again, we will stick to our return policy. So we are very disciplined, as you know, in everything we do. So we will stick within the EUR 80 million to EUR 100 million.

So we'll see how much total cash will be generated in '25, and we will use this to potentially execute any share buyback to, as I said earlier, reduce dilution at the time of warrant execution. But as you rightly said, we will cash in more than EUR 300 million end of June. And this cash, obviously, will have to be returned to shareholders within the same return policy we -- I stated earlier, 80% to 100% of total cash generation. Sascha, over to you.

Yes. Well, thanks for the question. But to be honest, I'm not sure whether I had too many successes. But as a team, we had a lot, and that's what we are proud of. I think ultimately leading to the establishment of a track record and therefore, the recreation of trust, I'd say, with many stakeholders, equity and credit alike.

So I think it's the sum of many of the operational initiatives from the team, the refinancing, some work on the financial infrastructure that we have been doing that ultimately led to the stage where we are. But again, we don't get tired of hammering the point home that we have done a lot of good, but there's more to come. Vallourec will go into the next phase of optimization. And this is why, for me, the story is ending, but for Vallourec, it's just the beginning.

Maybe Sascha is too modest, but you remember, we have refinanced our balance sheet in 2024. And it was obviously good to see that we managed to refinance it the way we did. On top, you remember that Fitch has awarded an investment-grade rating, and I hope more to come.

So again, for a company that was almost bankrupt in 2021 being where we are today with all the -- obviously, the opportunity we have to further create value through a much higher return on invested capital than our weighted average cost of capital is very rewarding. And again, I thank Sascha for having been next to me to deliver this super performance so far.

We have a question from Baptiste Lebacq from ODDO BHF.

First, Sascha, congrats for the very impressive job you have done, even if it's a job -- a team job, but very impressed by the way you did it and good luck for the future. One question regarding, let's say, working cap in Q4. You mentioned some delays in terms of deliveries.

We have seen some tension in working cap already in Q3. How should we think about, let's say, working cap at the end of the year? And second question regarding your, let's say, optimization of Brazilian assets. Is it now fully on stream? And if I'm not wrong, you could sell some, let's say, lands in this country. How is it evolving?

Well, as far as Q4 working cap, we expect a modest increase. So no big deviation versus where we are. As you know, since the beginning of the new alloy plan, I think we have been very focused on working cap. And as shown by Sascha in one of his slides, I think you can see that the working cap expressed in days sales has steadily decreased over time, and we continue and we see room for further improvement in the future.

So you refer to maybe, yes, some -- first, as we are very focused, and this is what's going to drive the next 5 years till 2030, return on investment capital, we challenge every asset in Ball. And so that's the part of the challenge. So the forest, obviously, is an asset, as you know, that doesn't generate EBITDA, but is used to produce veg charcoal.

So again, as any asset in Vallourec. And you remember when I said when I joined, there is no room for asset which is not generating cash. So each asset in Vallourec is challenged, and that's what just we do again and again.

Now we have a question from Jean-Luc Romain from CIC Market Solutions.

Congratulations to Sascha and to Connor for his promotion. My question relates to the second phase of investment in the mine in Brazil. Could you update us on where you are there and when it should start? And what are the benefits you are expecting from this second phase of expansion?

Yes. On the mine, thank you for the question. You remember at the Capital Market Day in September '23, we gave you some numbers on what we were doing and what we were expecting. And I'm glad to tell you that we delivered exactly what we said, even better. especially in H1 where we had the opportunity to extract high-quality iron ore from our mine.

So the expansion is well on track, Phase 1, Phase 2, and we expect to deliver the EBITDA we mentioned at that time, so up to EUR 125 million between EUR 100 million and EUR 125 million as we go. So very pleased with the progress of the mine. And on the mine, I insist that we are applying the same secret sauce that we do on the tube business, value over volume, and that's the reason why tonnage may be less, but quality is higher.

And the way we operate the mine enable us to extract more iron ore from existing room. So again, another good example of a value over volume strategy impact.

So as a follow-up, do you have in your mind kind of what do your geologists say better -- enough resources of better quality ore, which can help you continue increasing the value. That's what we should understand?

No, we are -- Yes, obviously, iron ore is what it is in the mine, and it may change from where we export from over time. But the way we process the iron ore, that may lead to higher iron ore content, so salable value at the end of the day. So that's exactly what we are doing. I won't go into the details, but...

Jean-Luc just remind that we are externally selling the vast majority of our ore production.

We deliver what we said we would deliver. But again, applying the secret sauce, value over volume, so less tonnage, but same EBITDA.

Now we have a question from Jamie Franklin from Jefferies.

So 2 from me. So firstly, you mentioned the divergence between seamless and welded. And looking at the historical data, it actually appears to be the highest point on record, the gap between the 2. Can you maybe talk about whether you see any risk here in terms of substitution of welded for seamless given that the differential is so high?

And secondly, if I can just push one more time on the Middle Eastern volumes. So I think previous expectation was that 4Q volumes would be substantially up in the third quarter in order to reach around 1.3 million tonnes in 2025. Now if we assume that 4Q is only slightly better than 3Q, we're going to get closer to 1.2 million for the full year. So can we assume that the entire delta there shifts into 2026?

And finally, Sascha, congrats on the great job you've done at Vallourec, wishing you all the very best in your new role.

Yes. I assume when you talk about divergence between seamless versus welded, you talk about the U.S. market. So yes, dynamic is -- again, we illustrated in our last quarterly communication, how these 2 markets diverge. Seamless imports are in proportion less than they are in welded. But at some point, it becomes noneconomical -- with the tariff, it becomes faster, noneconomical to import seamless and welded in a nutshell.

And that's why we see in our business, which is only seamless, faster, the impact of the tariff on our business. Substitution, we don't think so because as we said, the market is more and more premium and this [ ITO ] connection are seamless pipes, and they will continue to be seamless pipes. As far as volume are concerned, yes, which -- again, we have a slight increase in volume, maybe not as much as we could have expected, thanks to our forecast. So they are delayed because customers ask us to deliver pipes later in '26.

This will happen in '26. So we'll see what the volume will be. But as I said, we see drilling activity being back on the increase with some customers, to name one Aramco as an example, in Middle East. So we will see. But again, it's always a question, every quarter, we have to forecast what -- how much volume customer will call off from the orders we already have. It's a question of just delivering the order to match their needs.

There are no more questions at this time, so I hand the conference back to the speakers for any closing comments.

Thank you again for joining us for today's call. We are very pleased with the track record of execution since the launch of the new Vallourec plan in May 2022. We see further room to drive higher returns in our business. We will continue to optimize our capital allocation and capital return framework to deliver maximum value to our shareholders. Thank you again. Operator, you may close the call.