Tenaris Announces 2022 Third Quarter Results

Tenaris SA

The financial and operational information contained in this press release is based on unaudited consolidated condensed interim financial statements presented in U.S. dollars and prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standard Board and adopted by the European Union, or IFRS. Additionally, this press release includes non-IFRS alternative performance measures i.e., EBITDA, Free Cash Flow, Net cash / debt and Operating working capital days. See exhibit I for more details on these alternative performance measures.

LUXEMBOURG, Nov. 03, 2022 (GLOBE NEWSWIRE) -- Tenaris S.A. (NYSE and Mexico: TS and EXM Italy: TEN) (“Tenaris”) today announced its results for the quarter ended September 30, 2022 in comparison with its results for the quarter ended September 30, 2021.

Summary of 2022 Third Quarter Results

	3Q 2022		2Q 2022				3Q 2021
Net sales ($ million)	2,975		2,800		6	%	1,754		70	%
Operating income ($ million)	803		663		21	%	231		248	%
Net income ($ million)	608		634		(4	%)	326		86	%
Shareholders’ net income ($ million)	606		637		(5	%)	330		84	%
Earnings per ADS ($)	1.03		1.08		(5	%)	0.56		84	%
Earnings per share ($)	0.51		0.54		(5	%)	0.28		84	%
EBITDA ($ million)	946		806		17	%	379		149	%
EBITDA margin (% of net sales)	31.8	%	28.8	%			21.6	%

Our third quarter sales increased 6% sequentially as further pricing gains more than compensated lower shipments, which were affected by lower deliveries to pipeline projects and seasonal factors. Our EBITDA increased a further 17% sequentially with the margin rising above 30% following the increase in average selling prices which offset the increase in costs of raw materials and energy. Net income decreased 4% sequentially affected by non-operating items: lower results from our equity participation in non-consolidated companies (Ternium and Usiminas) and higher financial expenses.

Our free cash flow for the quarter remained positive at $113 million despite an increase in working capital of $601 million related to a buildup of inventories in anticipation of increased shipments and an increase in receivables. Our capital investments for the quarter, which included $56 million for the wind farm in Argentina, also increased. Our net cash position increased to $700 million at September 30, 2022.

Interim Dividend Payment

Our board of directors approved the payment of an interim dividend of $0.17 per share ($0.34 per ADS), or approximately $201 million. The payment date will be November 23, 2022 , with an ex-dividend date on November 21, 2022 and record date on November 22, 2022.

Market Background and Outlook

In an environment of high geopolitical and macro-economic risk, global economic growth is slowing, and energy prices have come off their recent highs. Conditions in the energy industry, however, remain supportive for an increased level of investment, with low levels of spare capacity and inventories, uncertainty about the impact of further sanctions on Russian exports and a renewed focus on energy security around the world. Global energy provision is constrained and all sources of supply will be needed to meet growing demand.

Drilling activity has increased this year and is expected to increase further, particularly in the Middle East and offshore. Global demand for OCTG is increasing and is expected to surpass pre-Covid levels in 2023. Pipeline activity is also advancing to support oil and gas developments, notably in Argentina and the Middle East.

In the fourth quarter, we anticipate further growth in sales boosted by higher shipments to pipeline projects and additional pricing gains. At the same time, our EBITDA margin should continue to benefit from higher operating leverage while our free cash flow should continue to recover.

US Trade Case

On October 27, 2021, the U.S. Department of Commerce (“DOC”) announced the initiation of antidumping duty investigations of oil country tubular goods (“OCTG”) from Argentina, Mexico, and Russia and countervailing duty investigations of OCTG from Russia and South Korea.

On October 26, 2022, the ITC issued a final determination that the imports under investigation caused injury to the U.S. OCTG industry. As a result of the investigation, Tenaris is required to pay antidumping duties (at a rate of 78.30% for imports from Argentina and 44.93% for imports from Mexico) on its imports of OCTG from Argentina and Mexico for five years. Tenaris has been paying such duties since May 11, 2022, reflecting the amount of such deposits in its production costs. The duty rates may be reset periodically based on the results of the review process.

Analysis of 2022 Third Quarter Results

Tubes

The following table indicates, for our Tubes business segment, sales volumes of seamless and welded pipes for the periods indicated below:

Tubes Sales volume (thousand metric tons)	3Q 2022	2Q 2022			3Q 2021
Seamless	750	815	(8	%)	675	11	%
Welded	106	75	41	%	71	49	%
Total	856	890	(4	%)	746	15	%

The following table indicates, for our Tubes business segment, net sales by geographic region, operating income and operating income as a percentage of net sales for the periods indicated below:

Tubes	3Q 2022		2Q 2022				3Q 2021
(Net sales - $ million)
North America	1,761		1,583		11	%	901		95	%
South America	600		462		30	%	314		91	%
Europe	190		259		(27	%)	141		35	%
Middle East & Africa	234		260		(10	%)	199		18	%
Asia Pacific	46		67		(31	%)	52		(11	%)
Total net sales ($ million)	2,832		2,632		8	%	1,607		76	%
Operating income ($ million)	780		636		23	%	200		290	%
Operating margin (% of sales)	27.5	%	24.2	%			12.4	%

Net sales of tubular products and services increased 8% sequentially and 76% year on year. On a sequential basis volumes shipped decreased 4%, affected by lower deliveries to pipeline projects and seasonal factors, while average selling prices increased 12% sequentially, more than offsetting the lower volumes. In North America, sales increased thanks to higher OCTG prices throughout the region and higher shipments of OCTG in Canada. In South America we had higher sales of OCTG to offshore projects in Guyana and higher sales for pipelines in Argentina. In Europe sales declined due to lower sales for offshore line pipe projects and lower sales of industrial products. In the Middle East and Africa sales declined as we had lower sales in Saudi Arabia and lower sales of high alloy products in UAE. In Asia Pacific sales declined reflecting the discontinuation of sales from NKKTubes in Japan and lower sales in China.

Operating results from tubular products and services amounted to a gain of $780 million in the third quarter of 2022 compared to a gain of $636 million in the previous quarter and $200 million in the third quarter of 2021. Our operating margin improved as tubes price increases more than offset higher energy and raw material costs.

Others

The following table indicates, for our Others business segment, net sales, operating income and operating income as a percentage of net sales for the periods indicated below:

Others	3Q 2022		2Q 2022				3Q 2021
Net sales ($ million)	143		168		(15	%)	147		(2	%)
Operating income ($ million)	23		27		(12	%)	31		(26	%)
Operating margin (% of sales)	16.2	%	15.8	%			21.4	%

Net sales of other products and services decreased 15% sequentially and 2% year on year. Sequentially, sales declined mainly due to lower sales of excess raw materials and lower sales of pipes for plumbing applications in Italy.

Selling, general and administrative expenses, or SG&A, amounted to $403 million, or 13.6% of net sales, in the third quarter of 2022, compared to $412 million, 14.7% in the previous quarter and $317 million, 18.1% in the third quarter of 2021. Sequentially, our SG&A expenses decreased mainly due to a reduction in logistic costs associated with lower shipments.

Financial results amounted to a loss of $29 million in the third quarter of 2022, compared to a loss of $11 million in the previous quarter and a loss close to zero in the third quarter of 2021. The financial result of the quarter includes a $30 million loss related to a dividend distribution in kind (Argentine sovereign bonds) paid by an Argentine subsidiary of the Company, which was impacted by the change in value of such bonds from the local Argentine market to the International market. This is related to foreign exchange control measures in Argentina, please see note 18 to our consolidated condensed interim financial statements for the nine-month period ended September 30, 2022.

Equity in earnings of non-consolidated companies generated a gain of $5 million in the third quarter of 2022, compared to a gain of $103 million in the previous quarter and a gain of $154 million in the third quarter of 2021. The result of the quarter includes a $32 million loss from an impairment in Usiminas ($19 million from our direct investment in Usiminas and $13 million from our indirect investment in Usiminas through Ternium). Excluding the impairment loss the equity in earnings of non-consolidated companies would have amounted to $37 million.

Income tax charge amounted to $171 million in the third quarter of 2022, compared to $120 million in the previous quarter and $59 million in the third quarter of 2021. The increase in income tax mainly reflects better results at several subsidiaries following the improvement in activity.

Cash Flow and Liquidity of 2022 Third Quarter

Net cash generated by operating activities during the third quarter of 2022 was $242 million, compared to $428 million in the previous quarter and $53 million in the third quarter of 2021. During the third quarter of 2022 cash generated by operating activities is net of an increase in working capital of $601 million mainly related to a buildup of inventories in anticipation of increased shipments and higher receivables reflecting the increase in sales.

With capital expenditures of $129 million, which include $56 million invested in the wind farm in Argentina, our free cash flow amounted to $113 million during the quarter and our net cash position amounted to $700 million at September 30, 2022.

Analysis of 2022 First Nine Months Results

	9M 2022		9M 2021		Increase/(Decrease)
Net sales ($ million)	8,142		4,464		82	%
Operating income ($ million)	1,950		434		349	%
Net income ($ million)	1,746		717		143	%
Shareholders’ net income ($ million)	1,746		730		139	%
Earnings per ADS ($)	2.96		1.24		139	%
Earnings per share ($)	1.48		0.62		139	%
EBITDA ($ million)	2,379		877		171	%
EBITDA margin (% of net sales)	29.2	%	19.6	%

The following table shows our net sales by business segment for the periods indicated below:

Net sales ($ million)	9M 2022			9M 2021			Increase/(Decrease)
Tubes	7,667	94	%	4,084	91	%	88	%
Others	475	6	%	380	9	%	25	%
Total	8,142			4,464			82	%

Tubes

The following table indicates, for our Tubes business segment, sales volumes of seamless and welded pipes for the periods indicated below:

Tubes Sales volume (thousand metric tons)	9M 2022	9M 2021	Increase/(Decrease)
Seamless	2,337	1,782	31	%
Welded	231	221	5	%
Total	2,568	2,003	28	%

The following table indicates, for our Tubes business segment, net sales by geographic region, operating income and operating income as a percentage of net sales for the periods indicated below:

Tubes	9M 2022		9M 2021		Increase/(Decrease)
(Net sales - $ million)
North America	4,691		2,122		121	%
South America	1,411		710		99	%
Europe	681		454		50	%
Middle East & Africa	676		623		9	%
Asia Pacific	207		174		19	%
Total net sales ($ million)	7,667		4,084		88	%
Operating income ($ million)	1,887		368		413	%
Operating margin (% of sales)	24.6	%	9.0	%

Net sales of tubular products and services increased 88% to $7,667 million in the first nine months of 2022, compared to $4,084 million in the first nine months of 2021 due to an increase of 28% in volumes and a 46% increase in average selling prices. Sales increased in all regions, mainly in North America where there was a recovery in volumes and prices throughout the region, led by the U.S. onshore market. Average drilling activity in the first nine months of 2022 increased 54% in the United States & Canada and 13% internationally compared to the first nine months of 2021.

Operating results from tubular products and services amounted to a gain of $1,887 million in the first nine months of 2022 compared to $368 million in the first nine months of 2021. The improvement in operating results was driven by the recovery in sales and margins, as higher tubes prices and an improvement in industrial performance due to the increased levels of activity and utilization of production capacity more than offset the increase in raw material and energy costs.

Others

The following table indicates, for our Others business segment, net sales, operating income and operating income as a percentage of net sales for the periods indicated below:

Others	9M 2022		9M 2021		Increase/(Decrease)
Net sales ($ million)	475		380		25	%
Operating income ($ million)	63		66		(5	%)
Operating margin (% of sales)	13.2	%	17.4	%

Net sales of other products and services increased 25% to $475 million in the first nine months of 2022, compared to $380 million in the first nine months of 2021, mainly due to higher sales of our oilfield services business in Argentina which offers hydraulic fracturing and coiled tubing services, higher sales of sucker rods and excess raw materials, partially offset by lower sales from the discontinued industrial equipment business in Brazil.

Selling, general and administrative expenses, or SG&A, amounted to $1,180 million in the first nine months of 2022, representing 14.5% of sales, and $869 million in the first nine months of 2021, representing 19.5% of sales. SG&A expenses increased mainly due to higher selling expenses (in particular commissions and freights) associated with higher sales and higher labor costs. However, they decreased as a percentage of sales due to the better absorption of fixed and semi-fixed components of SG&A expenses on higher sales.

Other operating results amounted to a net gain of $12 million in the first nine months of 2022, compared to a net gain of $50 million in the first nine months of 2021. In the first nine months of 2022 other operating results include a non-cash gain of $71 million from the reclassification to the income statement of NKKTubes’s cumulative foreign exchange adjustments belonging to the shareholders, an $18 million gain from the sale of land in Canada after the relocation of the Prudential facility, partially offset by a $78 million loss from the settlement with the U.S. SEC. The gain in 2021 was mainly due to a $34 million recognition of fiscal credits in Brazil and the profit from the sale of fixed assets in Saudi Arabia.

Financial results amounted to a loss of $42 million in the first nine months of 2022, compared to a gain of $21 million in the first nine months of 2021. The financial result in the first nine months of 2022 includes a $30 million loss related to a dividend distribution in kind (Argentine sovereign bonds) performed by an Argentine subsidiary of the Company, which was mainly impacted by the change in valuation of the bonds from the local Argentine market to the International market, as well as the decline in the fair value of certain financial instruments obtained in an operation of settlement of trade receivables in the second quarter of 2022.

Equity in earnings of non-consolidated companies generated a gain of $196 million in the first nine months of 2022, compared to a gain of $379 million in the first nine months of 2021. The result of the first nine months of 2022 includes a $32 million loss from an impairment in Usiminas ($19 million from our direct investment in Usiminas and $13 million from our indirect investment in Usiminas through Ternium) and an impairment on the value of our joint venture in Russia, amounting to $15 million. The remaining results are mainly derived from our participation in Ternium (NYSE:TX).

Income tax amounted to a charge of $359 million in the first nine months of 2022, compared to $117 million in the first nine months of 2021. The increase in income tax reflects better results at several subsidiaries following the improvement in activity in 2022.

Cash Flow and Liquidity of 2022 First Nine Months

Net cash provided by operating activities during the first nine months of 2022 amounted to $643 million (net of an increase in working capital of $1,408 million), compared to cash provided by operations of $73 million (net of an increase in working capital of $673 million) in the first nine months of 2021. Working capital, mainly inventories and trade receivables, has been increasing since 2021 following the recovery in activity from very low levels in 2020.

Capital expenditures amounted to $271 million in the first nine months of 2022, compared to $171 million in the first nine months of 2021. Free cash flow amounted to $372 million in the first nine months of 2022, compared to a negative free cash flow of $98 million in the first nine months of 2021.

Our net cash position amounted to $700 million at September 30, 2022, same level as at December 31, 2021.

Conference call

Tenaris will hold a conference call to discuss the above reported results, on November 4, 2022, at 09:00 a.m. (Eastern Time). Following a brief summary, the conference call will be opened to questions.
To listen to the conference please join through one of the following options:
ir.tenaris.com/events-and-presentations or
https://edge.media-server.com/mmc/p/9rkcyax4
If you wish to participate in the Q&A session please register at the following link: https://register.vevent.com/register/BI722f17c9bfb94b2ea67ce3682137cb5d
Please connect 10 minutes before the scheduled start time.
A replay of the conference call will also be available on our webpage at:
ir.tenaris.com/events-and-presentations

Some of the statements contained in this press release are “forward-looking statements”. Forward-looking statements are based on management’s current views and assumptions and involve known and unknown risks that could cause actual results, performance or events to differ materially from those expressed or implied by those statements. These risks include but are not limited to risks arising from uncertainties as to future oil and gas prices and their impact on investment programs by oil and gas companies.

Consolidated Condensed Interim Income Statement

(all amounts in thousands of U.S. dollars)	Three-month period ended September 30,				Nine-month period ended September 30,
	2022		2021		2022		2021
	Unaudited				Unaudited
Net sales	2,974,801		1,753,743		8,142,316		4,464,043
Cost of sales	(1,766,486	)	(1,214,451	)	(5,023,770	)	(3,211,232	)
Gross profit	1,208,315		539,292		3,118,546		1,252,811
Selling, general and administrative expenses	(403,435	)	(316,708	)	(1,180,097	)	(868,519	)
Other operating income (expense), net	(1,755	)	8,325		11,775		49,902
Operating income	803,125		230,909		1,950,224		434,194
Finance Income	26,998		4,988		42,264		32,203
Finance Cost	(17,741	)	(6,320	)	(25,703	)	(16,826	)
Other financial results	(38,368	)	1,024		(58,247	)	5,704
Income before equity in earnings of non-consolidated companies and income tax	774,014		230,601		1,908,538		455,275
Equity in earnings of non-consolidated companies	5,295		154,139		196,001		379,109
Income before income tax	779,309		384,740		2,104,539		834,384
Income tax	(171,239	)	(58,505	)	(359,010	)	(117,202	)
Income for continuing operations	608,070		326,235		1,745,529		717,182
Attributable to:
Shareholders' equity	606,470		329,871		1,745,962		730,157
Non-controlling interests	1,600		(3,636	)	(433	)	(12,975	)
	608,070		326,235		1,745,529		717,182

Consolidated Condensed Interim Statement of Financial Position

(all amounts in thousands of U.S. dollars)	At September 30, 2022			At December 31, 2021
	Unaudited
ASSETS
Non-current assets
Property, plant and equipment, net	5,640,329			5,824,801
Intangible assets, net	1,347,892			1,372,176
Right-of-use assets, net	112,342			108,738
Investments in non-consolidated companies	1,536,439			1,383,774
Other investments	150,489			320,254
Derivative financial instruments	-			7,080
Deferred tax assets	264,843			245,547
Receivables, net	220,312	9,272,646		205,888	9,468,258
Current assets
Inventories, net	3,679,135			2,672,593
Receivables and prepayments, net	208,287			96,276
Current tax assets	212,093			193,021
Trade receivables, net	2,013,660			1,299,072
Derivative financial instruments	46,178			4,235
Other investments	434,566			397,849
Cash and cash equivalents	994,854	7,588,773		318,127	4,981,173
Total assets		16,861,419			14,449,431
EQUITY
Shareholders' equity		13,204,886			11,960,578
Non-controlling interests		129,895			145,124
Total equity		13,334,781			12,105,702
LIABILITIES
Non-current liabilities
Borrowings	47,164			111,432
Lease liabilities	84,922			82,694
Deferred tax liabilities	284,549			274,721
Other liabilities	235,309			231,681
Provisions	91,318	743,262		83,556	784,084
Current liabilities
Borrowings	827,962			219,501
Lease liabilities	31,127			34,591
Derivative financial instruments	11,778			11,328
Current tax liabilities	288,208			143,486
Other liabilities	277,812			203,725
Provisions	10,829			9,322
Customer advances	324,623			92,436
Trade payables	1,011,037	2,783,376		845,256	1,559,645
Total liabilities		3,526,638			2,343,729
Total equity and liabilities		16,861,419			14,449,431

Consolidated Condensed Interim Statement of Cash Flows

(all amounts in thousands of U.S. dollars)		Three-month period ended September 30,				Nine-month period ended September 30,
		2022		2021		2022		2021
		Unaudited				Unaudited
Cash flows from operating activities
Income for the period		608,070		326,235		1,745,529		717,182
Adjustments for:
Depreciation and amortization		142,488		148,465		428,588		442,561
Income tax accruals less payments		72,639		12,197		118,590		11,630
Equity in earnings of non-consolidated companies		(5,295	)	(154,139	)	(196,001	)	(379,109	)
Interest accruals less payments, net		6,763		(490	)	5,152		(12,537	)
Changes in provisions		(1,210	)	4,618		9,269		14,216
Reclassification of currency translation adjustment reserve		-		-		(71,252	)	-
Changes in working capital		(601,242	)	(275,622	)	(1,408,341	)	(672,712	)
Currency translation adjustment and others		19,914		(8,360	)	11,741		(48,186	)
Net cash provided by operating activities		242,127		52,904		643,275		73,045
Cash flows from investing activities
Capital expenditures		(129,457	)	(74,306	)	(270,800	)	(170,871	)
Changes in advance to suppliers of property, plant and equipment		14,062		1,308		(5,793	)	(4,420	)
Acquisition of subsidiaries, net of cash acquired		-		-		(4,082	)	-
Proceeds from disposal of property, plant and equipment and intangible assets		772		9,016		46,768		14,355
Investment in companies under cost method		-		(692	)	-		(692	)
Dividends received from non-consolidated companies		-		-		45,488		49,131
Changes in investments in securities		128,746		35,500		85,175		278,423
Net cash provided by (used in) investing activities		14,123		(29,174	)	(103,244	)	165,926
Cash flows from financing activities
Dividends paid		-		-		(330,584	)	(165,275	)
Dividends paid to non-controlling interest in subsidiaries		(10,432	)	(148	)	(10,432	)	(3,355	)
Changes in non-controlling interests		(5,128	)	-		(3,506	)	-
Payments of lease liabilities		(10,431	)	(11,917	)	(38,836	)	(38,221	)
Proceeds from borrowings		497,982		289,579		1,349,718		575,698
Repayments of borrowings		(352,411	)	(370,438	)	(793,587	)	(674,325	)
Net cash provided by (used in) financing activities		119,580		(92,924	)	172,773		(305,478	)
Increase (decrease) in cash and cash equivalents		375,830		(69,194	)	712,804		(66,507	)
Movement in cash and cash equivalents
At the beginning of the period		635,928		585,239		318,067		584,583
Effect of exchange rate changes		(20,955	)	(2,380	)	(40,068	)	(4,411	)
Increase (decrease) in cash and cash equivalents		375,830		(69,194	)	712,804		(66,507	)
		990,803		513,665		990,803		513,665

Exhibit I – Alternative performance measures

Alternative performance measures should be considered in addition to, not as substitute for or superior to, other measures of financial performance prepared in accordance with IFRS.

EBITDA, Earnings before interest, tax, depreciation and amortization.

EBITDA provides an analysis of the operating results excluding depreciation and amortization and impairments, as they are recurring non-cash variables which can vary substantially from company to company depending on accounting policies and the accounting value of the assets. EBITDA is an approximation to pre-tax operating cash flow and reflects cash generation before working capital variation. EBITDA is widely used by investors when evaluating businesses (multiples valuation), as well as by rating agencies and creditors to evaluate the level of debt, comparing EBITDA with net debt.

EBITDA is calculated in the following manner:

EBITDA = Net income for the period + Income tax charges +/- Equity in Earnings (losses) of non-consolidated companies +/- Financial results + Depreciation and amortization +/- Impairment charges/(reversals)

EBITDA is a non-IFRS alternative performance measure.

(all amounts in thousands of U.S. dollars)	Three-month period ended September 30,				Nine-month period ended September 30,
	2022		2021		2022		2021
Income for continuing operations	608,070		326,235		1,745,529		717,182
Income tax	171,239		58,505		359,010		117,202
Equity in earnings of non-consolidated companies	(5,295	)	(154,139	)	(196,001	)	(379,109	)
Financial Results	29,111		308		41,686		(21,081	)
Depreciation and amortization	142,488		148,465		428,588		442,561
EBITDA	945,613		379,374		2,378,812		876,755

Free Cash Flow

Free cash flow is a measure of financial performance, calculated as operating cash flow less capital expenditures. FCF represents the cash that a company is able to generate after spending the money required to maintain or expand its asset base.

Free cash flow is calculated in the following manner:

Free cash flow = Net cash (used in) provided by operating activities - Capital expenditures.

Free cash flow is a non-IFRS alternative performance measure.

(all amounts in thousands of U.S. dollars)	Three-month period ended September 30,				Nine-month period ended September 30,
	2022		2021		2022		2021
Net cash provided by operating activities	242,127		52,904		643,275		73,045
Capital expenditures	(129,457	)	(74,306	)	(270,800	)	(170,871	)
Free cash flow	112,670		(21,402	)	372,475		(97,826	)

Net Cash / (Debt)

This is the net balance of cash and cash equivalents, other current investments and fixed income investments held to maturity less total borrowings. It provides a summary of the financial solvency and liquidity of the company. Net cash / (debt) is widely used by investors and rating agencies and creditors to assess the company’s leverage, financial strength, flexibility and risks.

Net cash/ debt is calculated in the following manner:

Net cash = Cash and cash equivalents + Other investments (Current and Non-Current)+/- Derivatives hedging borrowings and investments - Borrowings (Current and Non-Current).

Net cash/debt is a non-IFRS alternative performance measure.

(all amounts in thousands of U.S. dollars)	At September 30,
	2022		2021
Cash and cash equivalents	994,854		513,781
Other current investments	434,566		457,861
Non-current investments	144,222		369,079
Derivatives hedging borrowings and investments	1,284		3,381
Current borrowings	(827,962	)	(402,237	)
Non-current borrowings	(47,164	)	(111,442	)
Net cash	699,800		830,423

Operating working capital days

Operating working capital is the difference between the main operating components of current assets and current liabilities. Operating working capital is a measure of a company’s operational efficiency, and short-term financial health.

Operating working capital days is calculated in the following manner:

Operating working capital days = [(Inventories + Trade receivables – Trade payables – Customer advances) / Annualized quarterly sales ] x 365

Operating working capital days is a non-IFRS alternative performance measure.

(all amounts in thousands of U.S. dollars)	At September 30,
	2022		2021
Inventories	3,679,135		2,477,445
Trade receivables	2,013,660		1,111,174
Customer advances	(324,623	)	(56,738	)
Trade payables	(1,011,037	)	(791,424	)
Operating working capital	4,357,135		2,740,457
Annualized quarterly sales	11,899,204		7,014,972
Operating working capital days	134		143

Giovanni Sardagna        
Tenaris
1-888-300-5432
www.tenaris.com