general meeting of shareholders - tubos reunidos1t 2016 1t 2017 1t 2016 1t 2017 11.0 (2.3) 16...

GeneralMeetingofShareholders

June2017

1

1. 125YearsofHistory2. Resultsfor2016andFirstQuarter20173. StockMarketEvolution

4. Creating3600Value5. ProposedAgreements

Contents

2

GeneralMeetingofShareholdersJune2017

1.125YearsofHistory

3

125thANNIVERSARYOFTUBOSREUNIDOS:§ We’recelebratingthe125thanniversaryofthefoundingin1892ofTubosForjados,

theforerunnerofthepresentTubosReunidos.§ TubosReunidoshassurvivedallkindsofpolitical,social,wartimeandeconomic

situations§ Todaythecoreoffoundingshareholderscontinuestobemaintained.KeystoourHistory:§ Anearlyandpioneeringcommitmenttotheinternationalizationofthecompanyto

turnitintoaglobalbusiness.§ Undertakingtocontinuouslyadaptitsproductiveresourcestothelatest

manufacturingtechnologies.§ Realizationofcorporateoperationsuntilarrivingatthecurrentstructure.§ Astableboardandmanagementteam,withastrongcommitmenttothecompany.§ ValuesandvirtuesrecognizedandshapedbyallemployeesoftheCompany.

4

KEYSTOTHE2016FINANCIALYEAR:§ Economicandtechnological“war”betweenoilproducingcountriesandnewnon-

conventionaltechnologies.§ Theconsequencehasbeenacollapseinthepriceofoil.Cancellationinthechainof

investmentprojects.§ 23%reductioninoilplatformsoperatingworldwideand46%reductionintheUS,a

marketwhichfellby72%comparedto2014.§ Worldwideproductionovercapacity,especiallyinChina.Additionally:§ Needtofinalizetheplantomodernizeourfacilities.§ Developmentofaportfolioofmorespecializedproducts.§ EstablishmentofanewindustrialconfigurationinSpainandNorthAmerica.Consequences:§ ThenetturnoveroftheGroupfellby30%to195millioneuros.§ NegativeEBITDAof15.5millioneuros.§ Netlossof50.2millioneuros.§ Resultsequivalenttothoseofourmainglobalcompetitors,althoughthatisoflittle

consolationtous.

5

RESPONSEOFTUBOSREUNIDOS:TheBoardofDirectorsintervenedtodirectthecourseoftheprojectaroundthefollowingactions:§ ConcentrationoftheGrouponitsmainactivityofseamlesspiping:saleofthe

automotivebusinessandstartoftheprocessofdivestmentofthedistributionbusiness.

§ PurchaseofindustrialassetsofROTARYDRILLINGTOOLS(RDT)intheUSA.§ Financialdebtreorganizationplan:syndicatedloansignedin2017with10banks.§ EfficiencyandTransformationPlan(PET).§ RenewaloftheGroup’sproductcatalogue:ownproductsandthosepurchased

throughRDT.§ ProgressinTRPT:standardizationandappropriatetrainingplans.

6

ANEWTUBOSREUNIDOSISNEEDEDIN2017:§ Thenewscenariosmeanprofoundstructuralchangesinthesector,which

representnewchallenges.§ TheBoard’sproposalistomakealeaptowardsanewbusinessmodelthatwill

ensuregreateradaptabilityinthefaceoftheincreasingglobalcomplexity.§ NeedforanewleadershipheadedbyGuillermoUlaciaArnaizasExecutiveVice

President.Newmanagementmodelfocusedon:A. ThecustomerB. CompetitivecostC. FlexibilityD. Profitability:7-10%oncapitalemployed

7

GeneralMeetingofShareholdersJune2017

2.2016ResultsandFirstQuarter2017

8

2016:Yearofaseverecrisiswithoutprecedentinthesector

§ Ouractivityduring2016hastakenplaceinthecontextofaseverecrisis.

§ Thecollapseofthepriceofoil resultedinsharpdeclinesininvestmentintheenergysector.

§ Inparticular,theAmericanmarkethassuffered thegreatestdropindemandfortubing.

§ Asaresult,during2016wehavehadsignificantdeclinesinvolumesandprices.

§ Inthiscontext,duringtheyearwehave:

§ Maintainedourstrategy ofdevelopmentandpositioninginhighaddedvalueproducts.

§ Carriedoutcorporateactionsofgrowth,serviceimprovementanddiversificationintonewmarkets,aswellasconcentrationonourcorebusiness.

§ ContinuedwiththeexecutionofourEfficiencyandTransformationPlan.

9

2016Highlights

2012 2013 2014 2015 2016

International USA Canada

2030405060708090

100110120

11.217.717.516.5

USA-72%

8.8

Dec-13 Dec-15 Dec-16Source:Bloomberg Source:Tenaris

25%fallininvestmentforthesecondconsecutiveyear

Fallof46%inactiveplatformsintheUSAcomparedto2015andfallof72%comparedto2014

Dec-14

10

MarketContext

FallintheglobalconsumptionofOCTG,withgreaterintensityintheUSAandaccentuatedbythefallofinventories

BrentpriceevolutionUSD/BBL

CurrentglobalconsumptionofOCTGMill.TMs

9.6 10.6 9.7 7.4 6.6

5.7 5.7 6.5

31.8

2.2 1.2 1.5

0.8

0.4

295337

278

195

2013 2014 2015 2016(ExcludesAutomotiveandAlmesathroughouttheperiod)

14%2%

20%

13%

51%

20%

15%

32%

33%

EUROPEANUNION

NORTHAMERICA(USAandCANADA)FAREASTMIDDLEEASTANDAFRICA

OIL&GAS

ENERGYGENERATION

CHEMICALANDPETROCHEMICALINDUSTRIALAPPLICATIONS

OTHERS

11

SalesEvolution

Fallinsalesof30%withfallsinallsectorsandmajorgeographies

SalesevolutionofTUBOSREUNIDOSGROUP,(Inmillioneuros)

Compositionbysector andgeography,2016

38 37

7

(15)

2013 2014 2015 2016

7 7

(16)

(50)

2013 2014 2015 2016

12

Results

Thedeclineinmarginsandtheeffectofunderactivityhavehadanegativeimpactontheincomestatement

EvolutionofEBITDAofTUBOSREUNIDOSGROUP,(Inmillioneuros)

EvolutionoftheNetResultofTUBOSREUNIDOSGROUP,(Inmillioneuros)

(ExcludesAutomotiveandAlmesathroughouttheperiod)

45

2833

25

20

2013 2014 2015 2016

182172

167

195

2013 2014 2015 2016

13

Evolutionofthedebt

Increaseofdebtheavilyinfluencedbyinvestments

Grossinvestmentsintangibleandintangiblefixedassets(Inmillionsofeuros)

Evolutionofthenetfinancialdebt,(Inmillionsofeuros)

Saleofassetsfor16millioneurosin2016

Liquidityasof31December2016:63millioneuros

AcquisitionofRDT

14

Evolutionof1Q2017Sales

Thebestquarterforsalesinthelast8quarterswith53%growthcomparedto1Q2016

Sales(inmillionsofeuros)

1T2014

2T2014

3T2014

4T2014

1T2015

2T2015

3T2015

4T2015

1T2016

2T2016

3T2016

4T2016

1T2017

83.2 91.2 75.2 87.8 82.3 79.6 58.7 57.5 51.1 52.4 44.4 47.0 80.0

Salesoftubes,(thousandeuros)

1Q2017

1Q2016

%Inter-anual

variation

NationalEuropeNorthAmericaFarEastMENAOthers

11,56533,75828,5066,0806,2181,127

10,29127,8987,1574,8878,924647

12%21%

298%24%

(30)%74%

RefiningandPetrochemicalsEnergygenerationOil&gasConstruction,mechanical,automotive

7,51618,35735,90213,914

9,01918,64812,7319,115

(17)%(2)%182%53%

TotalConsolidatedGROUP 75,689 49,513 53%

Salesoftubing,tonnes 57,918 33,755 72%

15%

30%

38%

9%8%

1T2017

National Europe

NorthAmerica FarEast

MENA

10%

48%

24%

18%

1T2017

Construction&Industry

Energygeneration

Oil&Gas

RefiningandPetrochemicals

15

CompositionbySectorandGeography

NorthAmerica(40%ofsales)quadrupledsalescomparedtothepreviousquarterandtheOil&Gassector(50%ofsales)almosttripledsales.

1T2016 1T20171T2016 1T2017

11.0

(2.3)

16

Results1Q2017

RecoveryofthepositiveEBITDApath

EBITDAoftheTUBOSREUNIDOSGROUP,(Inmillionsofeuros)

NetProfitofTUBOSREUNIDOSGROUP,(Inmillioneuros)

(11.1)

0.1

4148

36

208 2

1111

5

15

2017 2018 2019 2020 2021 2022

BOND EIB BANKS

3 11 1126 33

96

58 8

8

15

2017 2018 2019 2020 2021 2022

BOND EIB BANKS

17

SignatureofSyndicatedFinancing

NewsyndicatedfinancingandtheagreementwiththeEIBsignificantlyreducerepaymentobligationsoverthecomingyears

DebtRepaymentBeforeSyndicatedFinancing,(Inmillionsofeuros)

DebtRepaymentafterSyndicatedFinancing,(Inmillionsofeuros)

GeneralMeetingofShareholdersJune2017

3.EvolutionStockMarket

18

Dec.2015

Dec.2016 2012 2013 2014 2015 2016

+47.9%

In2016,thesharepriceofTUBOSREUNIDOSwasrevaluedby47.9% fromtheclosingpriceofthe2015financialyearfrom0.585euros/shareto0.865euros/sharereachedby30December2016.

Sharetradinghasreducedby41.7%,reaching64millionshareswithavalueof46.3millioneurosaffectedbythedifficultsectoralenvironmentofthecompanyduringthefinancialyear.

19

StockMarketEvolution

EvolutionofthesharepriceofTUBOSREUNIDOS,(Eur/share)

VolumeofShareTrading,(InMillionsofshares)

22.036.0

82.0

108.0

64.0

0.8

0.6

0.4

0.2

1.0

GeneralMeetingofShareholdersJune2017

4.Creating3600Value

20

21

Index

▪ Introduction

▪ MarketoutlookandimplicationsforTR

▪ Assessmentofattainablepotential

* Base year: tonnes of 2014 (229 thousand) with prices and mix of 2017. Increase in EBITDA at constant scope without the distribution business

“Toknowistoforesee,toforeseeistobeable”AugusteComte

§ TubosReunidos(TR)isaniconic companywith125yearsofhistory,whichhasevolvedandadaptedtothechangesinthemarket,tobecomeabenchmarkforindustryintheBasqueCountry.

§ However,in2016 weobtainedtheworstresult inourhistorywithrevenuesbelow€200million(50%capacityutilization)andanegativeEBITDAof€15million.

§ Toensurealong-termfuture,weneed toachieveasustainableresult (EBITDA)andoptimizetheinvestedcapital.

§ WehavesetanobjectivetoimprovetheEBITDAofabaseyear*by€45million,withinaperiodof24months.

§ Thisgoalwillnotbeeasytoachieveandwewillhavetoworkinallareasofthecompany:improvebusinessandmarketing,increaseoperationsefficiency,improveproductivityandgainflexibility,reducetheneedforcapitalinvestment.Weneeda360O globaltransformationplan

22

ExecutiveSummary

410 385295 337

278195

2016201420132012 20152011

14%

57 5938 37

7

-15

24 11 7 7

-16

-50

EBITDA

NetResult

20142013 2015 201620122011

EBITDAandNetResultEURMillions

15% 13% 11% 3% (8)%Excludes automotive and distribution businesses

SalesEURMillions

Significantdropinsales,especiallyduringthelasttwoyears...

...andagradualfallinEBITDAsince2012,reachinganegativevaluein2016

EBITDA/Sales

23

In2016wesawtheworstresultsinour125yearhistory...

Highcostsandinflexiblecoststructure

Highvolatilityduetostrongconcentrationinfewmarkets

Pooraccesstoendcustomersworkingmainlywithdistributors

Verycompletebutcomplexproductportfolio

Profitabilitybelowthatofcompetitors

ProductsforOil&Gasrepresent~50%ofturnoverin1Q2017

In2016only~10%ofsalesdirectlytoendcustomers

+2,000references

24

Lookingtothefuture,wefacechallengesarisingfromourpositioninthemarket...

Dec16

Feb17

Apr17

Jun17

Aug17

Dec19

Assessment ofsituation

Marketoutlook1

Assessmentofmaximumpotential

2

Planning

Detaileddefinitionofinitiativesinvolvingallareasandfunctionsoftheorganization

3

IncorporationofExecutiveVicePresident

BoostEBITDA€45Millionoverabaseyear*,in24months

DebtRefinancing

Implementation

Implementationoftheinitiativesdefined

4

* Base year: tonnes of 2014 (229 thousand) with prices and mix of 2017. Increase in EBITDA at constant scope without the distribution business25

Wearelaunchinga360o ValueCreationPlan...

26

Index

▪ Introduction

▪ MarketoutlookandimplicationsforTR

▪ Assessmentofattainablepotential

Surpluscapacity

§ Overcapacity forseamlesspipingduemainlytotheabundantsupplyfromAsianproducers andthegrowingproduction fromemergingcountries1

Sophistication

§ Growingdemandformoresophisticatedproducts requiredbyoilandgasexploration(eg,horizontaldrilling)

§ Newdevelopmentsinthefieldofoilandgasrequiringtubescapableofwithstandinghigherpressuresinmoreadverseenvironmentsandhigherflows (especiallytubesusedintheoilindustry[OCTG])

2

Pricepressure

§ Fall inprices oftubesandreductionofthedifferential betweenbasicseamlesspipingandthoseofsuperiorquality3

ServicesandSolutions

§ Stronggrowthindemandforhighaddedvalueservices and“Premium”solutions4

Detailedbelow

27

Overall,weobservefourtrendsinthesteeltubemarket

SOURCE:JamesF.King,Jan.2017

32

45

38

25

2

4

2

1

4

16

2

42

1

0

3

24

10

2 303

3

3

6

2020

14

49

27

2

2000

1

3

21

4

1118

001

2

2

4

1

1

05

3 10

434

+3% peryear

+6% peryear

0

12% 0%China

0% 2%WesternEurope

2% 3%EasternEurope1

0% 4%NorthAmerica

-1% 7%LatinAmerica

7% 3%MiddleEast

5% 5%OtherAsianRegions

3% 6%Oceania

6%4%Africa

2000-2016 2016-2020

TCMA, percentage

1 IncludingCIScountries

Aslowdowninoilandgasactivitybecauseofexcesssupplyinthemarketandthelowoilpricesin2015 haveaffecteddemandin2016

Demandforseamlesssteelpipes(Inmillionsdetonnes)

28

Demandforseamlesspipingisforecasttogrowat3%perannum(2016-2020)

1

5

3

2016

5

3

20205

2020

16

6

2016

15

CapacityDemand

NorthAmerica

Overcapacityexistsinallregions- totalovercapacityof39%in2016 and30%in2020

EasternEurope1

OtherAsianRegions

China

EuropeEurope

LatinAmerica Africa

Global

2016

3 4

7

2020

7

2020

31

25

2016

30

24

70

49

2020

42

68

2016

2020

2

4

1

4

2016

12

2020

31

2016

0

2016

01

2020

1

2016

64

6

2020

3

Strongdependenceonimports

MiddleEast

Demandandcapacityforseamlesspiping(Inmilliontonnes)

SOURCE:JamesF.King,Jan.2017

1 IncludingCIScountries29

Globally,overcapacityisforecastinthesector,withamoremarkeddemand-capacityimbalanceattheregionallevel

1

1,700

600

1,300

700

500

1,900

1,500

400

1.000

1,800

1,600

1,100

900

2,000

1,400

1,200

800EasternEurope

01/1601/14

USAJapan

Export.China

WesternEurope

MiddleEast

01/1501/1301/1201/11

-56%

-29%

-50%

-45%

-34%

-48%

Priceofseamlesspiping(2011-2016)1ThousandUSD/t

SOURCE:JFK,MetalBulletin

1OCTGcoatingJ/K55(BTCconnection)30

Seamlesspipingpriceshavefallen~30-50%since2011,asChineseproducersofferpriceswellbelowWesternprices

3

600

2,000

400201520142012201120102009

1,200

20162013

1,600

800

2017

2,600

2,400

2,200

1,400

2,800

1,800

1,000

2006 2007 2008

Premiumgrade(OCTGcasingN80)

Commoditygrade(API5LB)

Priceshavebeenrecoveringsince2016duetoimproveddemandfromtheoilandgasindustryandhigherpricesforsteelrawmaterials,althoughtheyarestillbelowthefive-yearaveragepricelevel(USD1517)

Thepricedifferencebetweenbasicandhigh-qualitytubeshasbeensignificantlyreducedduetodecliningdemandfromtheoilandgassector,whichisthemainconsumerofhigh-qualitytubes

SOURCE:JFK,MetalBulletin

1Pricesoffinishedtubesforspecificquality

PricesforseamlesspipinginEurope1USD/ton(US)

31

Thepricedifferentialbetweenbasictubesandpremiumqualitytubeshasreducedsignificantlyinrecentyears

3

§ TRisacompanywithalegacyofhighquality productsandacompleteproductoffering (includingconnections),butalsowithacomparativelyhighproductioncost,andarelativelyhighlogisticalcostinmanyregions.

§ Withourstrategyofspecializationandservicewewereabletocompensateforthecoststructureofourindustrialandoperationalbases,however,theoutlookforthecomingyears anticipatesamorecomplicated environment:o Forecastfortheaveragegrowthoftheglobaldemandforseamlesspiping is3%peryear to2020.o Maintenance ofoversupply.o Prices ofsteeltubesarebelowboomlevels.o Increasing demandforhighqualityproducts derivedfromthedevelopmentofoilandshalegasis

notreflectedinapriceimprovement- competitors andsomenewoperators (mainlyAsian)haveimprovedqualityandofferlowerprices.

§ Inthisnewmarketenvironment,TRwillhavetoworkonthreekeyfronts:o Costs:TRmustbecompetitiveintermsofcosts,whichmeanstakingmeasuresatallofitscost

sources.o Commercial:sinceTRislikelytohavetoaccepttheprices andisarelativelysmalloperator,itmust

positionitselfinthemarketanddefineitsvalueproposition (ie,whereandhowtocompete,targetinterestingregions/segmentswithoutalteringmarketbalancesdrivenbylargeoperators).

o Service:TRmustensurethatitservesitsprioritycustomersegments optimally (rightservicefortherightprice),distinguishingitselffromcompetitiveoffersasappropriate.

32

MainimplicationsofthemarketperspectiveforTubosReunidos

33

Index

▪ Introduction

▪ MarketoutlookandimplicationsforTR

▪ Assessmentofattainablepotential

Ensurealong-termfutureforTubosReunidosasamanufacturerofhighqualityproductswithalongtraditionbasedintheBasqueCountry

6 Reachlevelsofprofitability(EBITDA)of~17-20%

7 Ensureasolventposition withthepotentialtoundertakenewinvestments

8 AttainaROCE of~7-10% afterthetransformation,comparedto~2%in2014

5 Developanexcellence-orientedbusinessculture

3 Optimize investmentinworkingcapitalandassets

4 Providegreaterflexibility tothecoststructure

1 Reducedirectoperatingcosts pertonneby~16-18%

2 Promotemargin-orientedbusinessmanagement

34

«Creating360OValue»isanacceleratedwaytoachieveouraspirations

Productionprocesses

Manufacturingefficiency

INITIATIVES

§ Increase theproductivity oftheworkforce ~20p.p.

§ Optimizemaintenance(increaseofpreventative) ~25p.p.

§ Increase theOverallEquipmentEfficiency(OEE) ~20p.p.

OBJECTIVE

§ Reduce consumptionofenergy ~5%

§ Reduce thenumberofotherconsumables ~9%

§ Optimize themixofrawmaterials ~3%

§ Reduce wastage ~2%

Generalexpenses

Purchases

§ Optimize thecostofcontractors ~5%

§ Reducetheunitcost of energy ~4%

§ Reducetheunitcostofconsumablesandsupplies ~5%

§ ReduceOverheads ~30%

35

Reducedirectoperatingcostspertonneby16-18%(1/2)1

Doesnotincludelogisticscosts

SOURCE:JFK

Carbonseamlesspiping,directoperatingcost¹,1Q2017,USD/ton(US)ofseamlesstube

1Operatingcostforunfinishedseamlesscarbonsteelpipewithadiameterof168mmandawallthicknessof7.1mm,notincludingsales,general,administrativeorfinancialexpenses,assumingastandardactivitylevelof90%P-110,qualitygradeAPIforgeneraluseindeepwells,pipelines,drillingandextractionofoilandgas,andfinancialcosts,assumingastandardactivitylevelof90%Assumingthesamesupply/demandstructure

2CostpertonnebasedonweightedaveragecostpertonneoftheAmurrioandGalindoplants

Cumulativecapacity,milliontonnes

OperatingcostOperatingcost/tonne

1stquartile 2ndquartile 3rdquartile

~16-18%

Others

TubosReunidos

TubosReunidos2

36

Reducedirectoperatingcostspertonneby16-18%(2/2)

1

OBJECTIVE

Margin-orientedbusinessmanagement

INITIATIVES

▪ EnhanceValueEngineering

▪ Redefinepricingpolicy

▪ Generatecross-sellingopportunities

▪ Evaluatethedevelopmentofonlinesaleschannels

▪ Streamline theproductportfolio

▪ Optimize theproductportfolio ▪ ~2%Changemix▪ ~3%Growth

37

Promotemargin-orientedcommercialmanagementbyleveragingtheproductioncapacityofhigh-endproducts(1/3)

2

INVESTMENTS PRODUCTS DIFFERENTIATION

OCTG:Oil&Gas

39%ofTR’sproductivecapacityishigh-endOCTG

▪ Casing,Tubing:Developmentofrangeofproprietaryproductsandhighalloysteelswithproprietarygradesofsteel

▪ TailorMadeSteelGrades– Improvedpropertiesoverstandardgrades– Forextremeenvironments:highcorrosion,acid,high

collapse,highpressureandtemperature

▪ UpsetCasingwithSemiPremiumBTXconnection:– Lowerconstructiontime(30%)and50%riskreduction

▪ Drillpipe ▪ WearKnotDrillPipe- Patent:– Designedforshaleformationsandabrasive

environments,3.5xlifeinservicecomparedwithstandarddrillpipe,designforlesswear

▪ PremiumJFEthreadedcapacityinnewplantwithMISI,TubosReunidosPremiumThreads:– Supplierinextremeenvironmentsofhighcorrosion

withTailorMadeSteelGrades– Metaltometalseal

▪ High-endfinishingcapabilities,inUSA,andPremiumthreadinTRPT-JFEthreads

▪ Installationofdegassinginsteelworks

▪ InductionHeatTreatmentLine

▪ NewTRPTpremiumthreadplant

▪ AcquisitionofRotaryDrillingToolsinUnitedStates

▪ Productdevelopment

38

Promotemargin-orientedcommercialmanagementbyleveragingtheproductioncapacityofhigh-endproducts(2/3)

2

▪ Installationofdegassinginsteelworks

▪ Adaptationoflinesforspeciallengths

▪ Newpilgertrainforlargedimensions

▪ Newkinematicchaininthedrill

▪ Productdevelopment/processengineering

▪ Highalloysteelswithmorecomplexchemicalcompositions

▪ Proprietarysteel– Moreresistanttohighpressuresandtemperatures

▪ High-ODandthicktubinginhighalloyandstainlesssteels

▪ Outerdiameter(OD)upto26”– Allowsgreaterefficiencyandperformanceinrefining,

petrochemicalandultra-supercriticalandnuclearpowergenerationfacilities

– Resistancetohightemperaturesandpressures

▪ Lengthsupto28metresandOD<16mm:Forexchangersinsolarthermalplantsandsteamgeneratingequipment

▪ Tubesupto26metresforHRSG’sinCombinedCyclePlants

▪ Colddrawntubeswithspeciallengths

12%ofTRcapacityishigh-endpipelineforpowergeneration,refiningandpetrochemicals

PRODUCTS

Energygeneration,refining,petrochemicals

DIFFERENTIATIONINVESTMENTS

39

Promotemargin-orientedcommercialmanagementbyleveragingtheproductioncapacityofhigh-endproducts(3/3)

2

Average:16.5%

TRobtainedanEBITDAof8.8%between2010-2015 Reach~17-20%

24.5

13.8

8.8

5

12.2

64

14.817.3

321

~17%-20%

“Creating3600Value”

GRUPOTUBOS REUNIDOS

GRUPOTUBOS REUNIDOS

40

Reachlevelsofprofitability(EBITDA)of~17-20%6

ROCE, %

-8

-3

34

8

2

201320122011

+5-8p.p.

2015 360º2014

~7-10%

2016

WACC=7.0%

MethodofcalculationofROCE▪ ROCE:NOPLAT/InvestedCapital▪ WACC:Strategicplan▪ NOPLAT:EBITx(1-Taxrate);Rate:28%▪ Cost(exD&A):Sales- EBIT+D&A

▪ Investedcapital:FixedAssets+WorkingCapital▪ FixedAssets:Non-CurrentAssets,excludingFinancialAssetsandDeferredTaxAssets▪ WorkingCapital:Inventory+AccountsReceivable- AccountsPayabletoSuppliers.ExcludesConfirmingandFactoring

41

AttainaROCEof~7-10%afterthetransformationcomparedto~2%in2014

8

Preservingsustainableresults

StrategicPlanningandBusinessDevelopment,S&OP

DevelopmentofHumanResources

Economic-financial

TransformationTeam

CreateandGetResults

SupporttotheOrganizationatthelowestcost

GoalSettingandLeadershipoftheTransformation

CustomerValueCreationPlatform

Downstream UpstreamCUSTOMER

TUBOSREUNIDOS:UNIQUEBRAND

42

Wehavedefinedanewmanagementmodel...

Improvingcostcompetitiveness

Differentiationinhigheraddedvalueproducts

Increaseofservices

Digitalizethecompany

Manageculturalchange

Achieveefficienciesbymanagingsocialchallenges

UniqueBrandTubosReunidos

“Letusseekmoretobeparentsofourfuturethanchildrenofourpast”MigueldeUnamuno

43

Seizingtheopportunityrequiresovercomingsomesignificantchallenges

GeneralMeetingofShareholdersJune2017

5.Proposalofagreements

44

First§ Toapprovetheannualaccounts(individualandconsolidated)for

the2016financialyear,andthesocialmanagementoftheboardofdirectors.

Second§ Applythelossesforthe2016financialyear,amountingto

332,652.36Euros,to"Negativeresultsfrompreviousyears".Third§ AppointmentandRenewalofDirectors

3.1Mr. GuillermoUlaciaArnaiz(Executive)(Ratification,co-optationandappointment).

3.2Mr. PedroAbásoloAlbóniga(OtherExternal)3.3Mr. AlfonsoBarandiaránOlleros(Proprietary)3.4Mr. FranciscoEsteveRomero(Proprietary)

45

Proposedagreements

3.5Mr. JorgeGabiolaMendieta(Independent)3.6Mr. EmilioYbarraAznar(Proprietary)3.7Ms. LeticiaZorrilladeLequerica(Proprietary)3.8Mr. JuanMaríaRománGoncalves(Independent)

(Newappointment)3.9MaintainvacancyofMs. MaríaLuisaJordáCastro.

§ Thosepresentacceptthepost;withoutconflictofinterest.§ Compositionoftheboard:12memberswithintheminimum(5)

andmaximum(14)accordingtostatute.

46

Proposedagreements

Fourth§ Re-electPriceWaterhouseCoopersasauditorforoneyear.Fifth§ Authorizetheacquisitionofownshares.SixthMODIFICATIONOFART.26ο SOCIALSTATUTES(CompensationoftheBoard).§ Includethepossibilityofremunerationthroughthedeliveryof

shares,options,referencetotheirprerequisitevalueàintheseventhagreement.

§ Civilliabilityinsurance(technicalimprovement).

47

Proposedagreements

SeventhRemunerationplanlinkedtoshares:Executivevice-president.§ NumberofPlanshares:2,000,000.§ Referenceprice:averageprice30sessionsfrom07-02-2017=0.997

Eur/share– Term:50%:March2019- bydifference(topayinMarch2021).– 50%:March2021- bydifference,sharesorboth.

§ Requirements:linkedtoTubosReunidosuntilMarch2021.Eighth§ Powersandauthorityinrelationtothepreviousagreements.Ninth§ Toapprovethe“AnnualReportonCompensationoftheBoard”ona

“consultative”basis.

48

Proposedagreements

GeneralMeetingofShareholders

June2017

49