Vallourec (VK) Q1 2026 earnings summary

Executive summary

• Q1 2026 EBITDA reached $220 million (22.6% margin), exceeding guidance midpoint, with strong cash generation and net cash position of $67 million after $107 million in share buybacks.

• Reporting currency changed from euro to US dollar effective January 1, 2026, with 2025 figures restated for comparability.

• Over 60% of EBITDA converted to cash; adjusted free cash flow was $177 million.

• Resilient performance despite Middle East disruptions, with order postponements but no cancellations; US market activity and pricing improving.

• Signed a record $800 million, 5-year geothermal supply agreement with Fervo Energy, supporting new energies growth.

Financial highlights

• Q1 2026 group revenues were $975 million, down 7% year-over-year and 19% sequentially, mainly due to lower Tubes volumes.

• EBITDA was $220 million, up 2% year-over-year but down 12% sequentially; EBITDA margin improved to 22.6%.

• Net income group share was $87 million, nearly flat year-over-year.

• Adjusted free cash flow was $177 million, with net cash position improving by $21 million sequentially.

• Gross debt reduced to $994 million; liquidity strong at $1.9 billion.

Outlook and guidance

• Q2 2026 EBITDA expected between $175–205 million, with Q2 as the low point for the year.

• Tubes volumes and EBITDA per ton expected to decrease sequentially in Q2 due to Middle East conflict, but improvements anticipated in H2 if geopolitics stabilize.

• North America Tubes volumes to remain strong, with upside in H2 as drilling activity increases; international Tubes recovery expected in H2.

• Iron ore production sold projected at 5.5 million tonnes for 2026.

• Mine and Forest production sold expected at 1.4 million tons in Q2; full-year guidance for 4.5 million tons confirmed.