DIPS town hall registrazione

0:00

S… Speaker 1 (DIPS town hall registrazione)

everyone uh welcome to our second dips town hall so we've brought the entire staff has been invited for dips uh across the plants across the offices and also we've invited the functional teams who support more closely with us so we've got a big group invited we'll see how many

0:22

S… Speaker 1 (DIPS town hall registrazione)

are able to join so it's been about seven months since our last update a lot has happened in that time today we're going to focus on a couple areas we'll look at our safety performance as always something new we're going to look at some key achievements across the organization that have happened since we spoke last i will address our markets and our business outlook as always and a new part we're going to look at the results of the recent employee opinion survey for all of dips and also touch on all of tenors

0:52

S… Speaker 1 (DIPS town hall registrazione)

So that will hopefully be interesting to you. I'm going to have to move at a good pace. I'm going to have to cover quite a bit of ground. So if you guys have any questions, I advise you to note them down as we go. I will have time to ask questions at the end.

1:05

S… Speaker 1 (DIPS town hall registrazione)

And I do want to say that it's almost impossible to compile a set of information that's completely relevant to all of you for all the slides. We are a very functionally diverse group, and we're too geographically spread as a business to be able to make everything relevant to everybody. So I hope the information about different parts of the business that you might not be familiar with helps you understand DIP's overall business better. So I hope that this is interesting for all of you.

1:34

S… Speaker 1 (DIPS town hall registrazione)

A couple housekeeping items here. If you're connected from home, they advise me to tell you that don't use the VPN. I don't know if that's bad for you or bad for the VPN, but be disconnected from the VPN, please. During the presentation, I'll have my cameras on. You guys keep yours off and the microphone's off and we'll then have a Q&A at the end where you'll be able to turn the microphone on camera if you want and ask me any questions that you have.

2:03

S… Speaker 1 (DIPS town hall registrazione)

There was some requests at the end of the last town hall to change the Q&A a little bit so that questions are pre-submitted. We decided not to do that this time because we got a set information we need to get through, but for the next one, we may consider that. Okay, so let's start with safety performance across Tenaris and across DIPS.

2:28

S… Speaker 1 (DIPS town hall registrazione)

So at a tenorist level, all three key indicators, total incident frequency, high potential near-miss incident frequency, and major incident frequencies, they've all increased slightly. So fortunately, fatalities still at zero, which is critical. And that's especially in the last two years, we've seen multiple fatalities in the last year and the year before. So that's good, but the overall uptick in incidence is not where we want it to be.

2:54

S… Speaker 2 (DIPS town hall registrazione)

So when we look at the most serious incidents and trends across Tenaris, there seem to be four clear themes that are very relevant to our business. And the first is vehicle and mobile equipment incidents are increasing at a disturbing pace. We have too many cases of people being close to moving equipment when these types of incidents occur. Second, lifting incidents are increasing across Tenaris, including drop loads and lifts that are not stable.

3:21

S… Speaker 2 (DIPS town hall registrazione)

Third, working at height is generating incidents, often relying on informal practices instead of proper controls for working heights. And fourth, hazardous energy and lotto failures are occurring. These are not as frequent as the other ones, but they carry the highest risk. And we saw a couple very serious near misses due to a change in a working instruction that did not.

3:44

S… Speaker 2 (DIPS town hall registrazione)

affect a lot of procedure and a near electrocution in Argentina. So all of these items need to be on our focus list. Looking specifically at DIPS on the right, our total incident frequency is higher than both Tenaris's overall and our internal target. Although most of these incidents are limited to first aid cases.

4:04

S… Speaker 2 (DIPS town hall registrazione)

On a positive note, our high-miss or our high-severity near-miss incident indicators are below to our level, and they're also below the targets we set, which is good. So we're having more incidents than we targeted, but they're less severe. So I can live with that.

4:21

S… Speaker 2 (DIPS town hall registrazione)

We did have two serious lost time incidents so far this year. We had one in Batam, we had one in TCI. And in both cases, the injuries occurred when employees made a decision to intervene, fix a problem, and they exposed themselves to live equipment in doing that. And this is a violation of our rules.

4:38

S… Speaker 1 (DIPS town hall registrazione)

One incident resulted in a broken bone in hand, and the other one in TCI resulted in several burns on the employee's hands and arms. And that could have been much worse because the employee was partially pulled into a conveyor. He was able to pull himself out, but burn himself in the process. These were not system of failures. These were decisions that were made in the moment to act outside the system.

5:00

S… Speaker 1 (DIPS town hall registrazione)

safe method, and this is the point I need to emphasize to all of our site-based teams. We've got multiple layers of protection in our operations. We've got procedures, we have training, we have supervision, we've got equipment safeguards. When these layers don't hold, and there are holes in every level of protection there, the decision is often an employee, or an employee is often forced to make a decision under pressure.

5:24

S… Speaker 1 (DIPS town hall registrazione)

And that decision is, do I stop the job or do I take a shortcut and fix the situation? And our responsibility of leaders is to make it easy for these employees in this situation to make the right decision.

5:37

S… Speaker 1 (DIPS town hall registrazione)

No employee should ever feel that production schedule or cost is more important than stopping a job when it's not safe. So my request to all plant leaders and site personnel, reinforce this message constantly. Please lead by example. Recognize people when they make the right call, especially when it means stopping work. In both our serious incidents, a different decision by the employee would have prevented the injury. Okay, so I'll get off my soapbox there and move on.

6:06

S… Speaker 1 (DIPS town hall registrazione)

Okay, I'd like to move to a critical topic that's impacting us in multiple ways. And this is a situation in the Middle East. So Palo Roca covered the broader perspective for Tanaris in the town hall that he did. So I'm going to focus specifically on dips and all our people and our operations. So first, most importantly, our people. We got a coding facility and an office in Russell Kama. We have a smaller presence in the Dubai.

6:33

S… Speaker 1 (DIPS town hall registrazione)

office and vets in our households. And during March, our operations at Rosso Cayman were completely suspended due to the proximity of Rosso Cayman to the Strait of Hormuz and the escalation of activity in the immediate area of RAC. And if you look at the map on the slide, you can see that Star is where Rosso Cayman is, and it's basically as close as you can get to the contested part of the Strait.

6:56

S… Speaker 1 (DIPS town hall registrazione)

I'm very pleased to say that all of our employees remained safe throughout this period, and we did restart operations in early April under modified conditions. We used enhanced emergency procedures, and today the site is operating close to full capacity again. So what's the impact on our projects? We declared force majeure on projects in Rasakema. We're currently facing significantly higher energy costs, particularly due to the diesel price. The price of diesel in Iraq has basically doubled.

7:24

S… Speaker 1 (DIPS town hall registrazione)

There's also ongoing risk to supply chains. Both our inbound raw materials and our outbound deliveries, particularly to Iraq and Saudi Arabia from HBI, are at risk. And this is going to be an evolving situation depending upon what happens. In terms of the broader business impact, the situation is also impacting other areas of our network.

7:49

S… Speaker 1 (DIPS town hall registrazione)

So in Europe, the energy costs are increasing and this is impacting our costs in the steel mill and dominate. And many of our coating materials, which are hydrocarbon based, are becoming more expensive. Our commercial teams, our buco teams are actively working to manage this. We're doing things like pricing adjustment mechanisms, hedging mechanisms.

8:10

S… Speaker 1 (DIPS town hall registrazione)

putting provisions in our contracts to make sure we're protected, and in some cases going to our customers and asking for temporary compensation measures, some of which are being met more amicably than others. But we are trying to keep our prices moving up higher than our costs. I also want to take a moment to recognize the teams in the region. During the conflict period,

8:32

S… Speaker 1 (DIPS town hall registrazione)

These teams were operating under very difficult conditions, both professionally and personally, and they have continued to support the business with resilience and professionalism. They have our full appreciation and they have our full support. Looking ahead, the situation remains uncertain.

8:50

S… Speaker 1 (DIPS town hall registrazione)

In the short term, we will continue to monitor the developments closely and make decisions as the situation unfolds. This is still very fluid. In the long term, the increased focus on energy security and diversification may actually support increased demand in our markets. But our position is very clear. We will always prioritize the safety of our people first, even when this creates disruption to the business.

9:17

S… Speaker 1 (DIPS town hall registrazione)

So, before I get to the market updates, I want to focus on several achievements made by our global site and business teams since speaking to you last. There are a good number of these. We'll be moving around our different sites and businesses quite quickly, so I hope you can follow. These are not all the achievements that we've made across DIPs, but they're good examples of the type of work and teamwork.

9:39

S… Speaker 1 (DIPS town hall registrazione)

that is happening across our organization. And sometimes things just move too fast and we get too busy to recognize the smaller but really important things that we're achieving. So first, I'd like to recognize the Batam team. In April, they successfully passed the ISO 2.

10:00

S… Speaker 1 (DIPS town hall registrazione)

audit and are now formally included in global ISO certification for Tenaris for both safety and environmental management. This required implementing new systems, aligning with tough global standards, and proving compliance under audit. This is not easy when you're being integrated in a new company. So big thankful to thank you to the HSC, the HR, the quality, the project, and the operations teams at Baton for this achievement. I know other sites are also on this track, so I hope to announce

10:29

S… Speaker 1 (DIPS town hall registrazione)

More qualifications soon. Next, an accomplishment in Rasokema, the quality team there led by Vijay Jha. In just six months, that team built and accredited a full laboratory system to ISO 17025 with zero nonconformances. This was critical for Adenok projects and required intense cross-functional effort and discipline. It was a tremendous achievement. I'd like to say well done to the entire Rasokema quality team. I'll stay in Iraq.

10:59

S… Speaker 2 (DIPS town hall registrazione)

here and highlight a simple but very impactful innovation.

11:04

S… Speaker 1 (DIPS town hall registrazione)

The operations team has completely redesigned part of the concrete coating process to improve thickness control, reduce rework, and eliminate high-risk manual measurement step. The result is better quality, safer operations, and improved efficiency. And it was one of the most clever innovations to impinge concrete application in many years. So this is the exact type of practical local innovation that I'd like to see. So well done to the team. I don't know if the people who made this work are on the call.

11:33

S… Speaker 1 (DIPS town hall registrazione)

So Reven, I request that you or someone on your team, let them know about this public recognition. Okay. Moving to HPI and downstream, I want to recognize the teams first that implemented what we're calling the Tenaris Marketplace tool with key customers. This transforms a largely manual process into a structured digital workflow, and it is a huge step forward in terms of efficiency and scalability.

12:02

S… Speaker 1 (DIPS town hall registrazione)

This was a strong collaboration between IT, Buko, and the commercial teams, and it sets the foundation for further automation, and we're looking at including AI in the HPI environment in the future. So HPI will probably be the first place where we have an actual AI program that's part of the two largest AI development.

12:22

S… Speaker 1 (DIPS town hall registrazione)

Also in HPI, the Asia-Pacific team successfully secured TKDN certification in Indonesia. This is a key requirement for participating in local downstream projects. It opens important commercial opportunities for us. It required coordination against multiple functions and regions. It was not a simple task, and I hope we can now reap the rewards of the hard work that the team put in. And finally for HPI, I want to recognize the team's success with Chimtas.

12:48

S… Speaker 1 (DIPS town hall registrazione)

Through strong customer engagement and execution, HPI secured repeat orders around 6,000 tons this year from this customer and secured an important presence in the U.S. liquefied natural gas build-out in the process. This is exactly how we build long-term business. We deliver and we earn repeat trust. Well done to the EU project team for that.

13:13

S… Speaker 1 (DIPS town hall registrazione)

Okay, moving to Norway. The Orkanger team has made a significant improvement in quality performance. Defect rates and rejections have been reduced by more than 50% compared to last year. This is a result of coordinated effort against production, against maintenance, and the quality teams. So this is a very strong and very noticed operational improvement, and I would like to give congratulations to everybody in Norway involved with this improvement. At TCI, I want to recognize the team managing the Sakarya PQT program.

13:44

S… Speaker 1 (DIPS town hall registrazione)

Highly complex and demanding qualification efforts. Requires coordination across multiple functions under tight timelines. The team has gone above and beyond to keep this aligned with the schedule. So I'd like to thank the TCI quality team, the lab team, the production team for this effort. We're still in the middle of it, but so far it's gone very, very well. Okay. A lot of you may not even know, but we have a team in Nigeria.

14:13

S… Speaker 1 (DIPS town hall registrazione)

So I would like to recognize the team behind the Banga North project. Banga North was a mobilization. It was complex. It was demanding. It was completed in a very short time frame, just 12 months, and included the successful startup of that thermal insulation line after a full renovation and fully aligned with the project schedule. The project's now in full swing, and despite a lot of challenges, the team is poised to deliver on this project on time and on budget.

14:41

S… Speaker 1 (DIPS town hall registrazione)

But what stands out to me is the collaboration. So this is a collaboration between engineering, DIPs, and the local PCN team working together with a strong ownership on the ground, driving execution day after day. It's a good example of one team, one result, combines global expertise with strong project execution.

15:00

S… Speaker 1 (DIPS town hall registrazione)

So thank you to everyone involved, especially the individuals recognized on this slide. And finally, in Western Hemisphere, I want to recognize the Manatee Project team, who recently completed the coding phase of that project in Quantico, Mexico. This was one of the most demanding projects we have executed in recent years. Over 10,000 pipes concrete coated and delivered under very challenging conditions in a remote location.

15:26

S… Speaker 1 (DIPS town hall registrazione)

And we experienced a lot of damaged incoming material, which resulted in another very complex material repair scope as well. Despite this, the team delivered safe and nearly flawless execution, which is an outstanding result at this scale. It's also strengthened our relationship with the customers, like Shell and McDermott, critical for future work. A huge effort by the entire team, and I would like to specifically recognize the individuals that are listed on the slide.

15:55

S… Speaker 3 (DIPS town hall registrazione)

Finally, I'd like to acknowledge Jamal, who sadly passed away from a heart condition during the execution of the project. He was key to this team. He will be missed and he will be remembered.

16:07

S… Speaker 1 (DIPS town hall registrazione)

So before I move from recognition, I also want to thank both the Global Buco, the Global Project teams for their continuous hard work, supporting all of the four sub-business units to reach their commercial goals, and also the recent efforts to help mitigate the Middle East conflict impact, which has been complex for both the project side and for the Buco side. I know the Buco team in particular have been under a lot of pressure.

16:34

S… Speaker 1 (DIPS town hall registrazione)

to get offers out as well. And as you will see soon, we are tendering a lot of projects. So I'd like to thank all of you. And if you feel I should have called you out, I cannot call every individual out, but over these town halls, I'll try to make sure that we make our way around each of the sites and locations. Okay, before we move to the market, I do want to give a quick update on the SAP ActiveCycle implementation across our current sites.

17:02

S… Speaker 2 (DIPS town hall registrazione)

So as a reminder, the passive cycle, which covers purchasing, warehousing, goods, receipts, supplier payments, this has already been implemented to the Tanara Shalkor plants. It was a difficult rollout. Some sites are still working through issues. I want to thank everyone who supported the effort. You kept your chins up. Things are now settling down, and I see lots of improvement.

17:23

S… Speaker 2 (DIPS town hall registrazione)

The active cycle on our coding sites is the next step. So this covers customer orders, production tracking, manufacturing management, and invoicing. It's already live in Channelview. It's live in Mexico. Kabil is next, and I actually believe Kabil starts next week, followed by TCI, and then we have a bit of a gap, and Norway and Russell Campbell will come later. The delay is mainly due to the broader Tenoris overall SAP upgrade, which is going to absorb all their implementation resources.

17:52

S… Speaker 2 (DIPS town hall registrazione)

And also because Oracle requires additional digital quality development, additional quality system development to convert to SAP. And also they need that to adopt to a new pipe tracking program. The good thing about this is that the digital quality system that we're going to build for Oracle will then be rolled out to all the coding sites and should create a better, more standardized tool for recording our quality information. So hopefully within.

18:19

S… Speaker 2 (DIPS town hall registrazione)

A year and a half, we're going to have our own self-constructed digital quality module rolled out across the sites. I guarantee you that'll be game-changing. So transition is not easy. The goal is clear. A more integrated, more digital, and more consistent way of managing our coding business and our operations. And again, I thank you all for your patience as we move through this. Okay. I'll provide you now an update on our markets, our business, and our financial performance. What we're looking at here.

18:53

S… Speaker 1 (DIPS town hall registrazione)

is our core market. It's an offshore, small diameter, seamless pipe, subdivided by region on the left and the associated coding for this market, subdivided by coding type on the right. Tons on the left, kilometers on the right. I know a little bit confusing. I did display the same charts in the last town halls. This is overall global demand. The message from the charts is it's been relatively soft in 25, 26 in terms of overall market demand.

19:22

S… Speaker 1 (DIPS town hall registrazione)

But as we are entering a strong upcycle with demand peaking in 27 and 28, and I believe these are record levels, growth is broad based. It comes from Europe. It comes from Mediterranean. It comes from Africa, all areas where we are strong, but also Latin America and Asia, where we need to compete harder and where we are actually forecasting success. And importantly, coding pipe demand is growing just as fast as pipe demand.

19:48

S… Speaker 1 (DIPS town hall registrazione)

including insulation, which plays directly into our strengths. So overall, this is a very positive demand environment for our core market. I want to also show you

20:00

S… Speaker 1 (DIPS town hall registrazione)

The large diameter welded line pipe, LSAW or SALW market that we're seeing in the future, the pattern is similar. Demand is expected to increase significantly over the next two to three years. This is driven by LNG, by gas transport, and increasingly CO2 infrastructure.

20:20

S… Speaker 1 (DIPS town hall registrazione)

This is a much more competitive space. We don't have as much differentiation here. We're not the number one player. But when we do win projects here, the impact is significant because the projects can be very, very large. We're seeing growth in associated concrete weight coating as well, which is an area which in our Shaw Corps have a clear advantage. So we'll continue to compete and we'll continue to bid.

20:43

S… Speaker 1 (DIPS town hall registrazione)

in this LSA large diameter market, and we will also offer both bundles and standalone concrete way coating into this market. We're in fact tendering several large projects now, and we expect this to continue for the coming years. So we're excited about this market. We need to be selective, but we will continue playing.

21:03

S… Speaker 1 (DIPS town hall registrazione)

So let's dive into how the market outlook is translating into both our current year and our future forecasts for dips. I'll begin with this view of the current year. This is 2526. This budget year will end in June of 2026. So we're approaching closure in about two months. So we should have a pretty good idea of where we're going to end up.

21:26

S… Speaker 1 (DIPS town hall registrazione)

So for the current year, it's clear from the forecast that you see that we will not fully meet our original budget on either tonnage or on forecasting. The main reason is timing. Several large projects were delayed this year and they were not lost. Many of these projects have now been awarded and will move into the next budget year. There's three additional important points I want to highlight on this slide. First, HPI at the bottom of this table continues to perform extremely well.

21:56

S… Speaker 1 (DIPS town hall registrazione)

Meeting its targets and providing stability to the DIPPS business. I want to again thank and congratulate the HPI team for their contribution to DIPPS success this year. And I recognize the hard work that is behind this excellent performance. If you look at it, they were spot on. Their Tundish forecast, they're looking at being spot on and just about spot on on their invoice forecast. Pretty incredible. Second point, coding on third-party pipe remains a critical part of our business model.

22:25

S… Speaker 1 (DIPS town hall registrazione)

and it represents about 30% of our invoicing. It's also an important driver of DIP's plant utilization. So even though we would like to increasingly sell bundles of Tenaris pipe and coating to our customers, we're going to continue to offer standalone coating services in markets where it makes sense. We also need to do this to keep our pipe coating facilities busy. And third, despite the shortfall versus the budget, this is still a pretty solid year. We've made good contributions to Tenaris' overall results.

22:53

S… Speaker 1 (DIPS town hall registrazione)

And this year sets us up very well for what comes next. Okay, now I'm going to move from the present to the future view with an updated forecast of our future business outlook. So what you see here is an important slide. I showed you this one last time as well. It reflects the dip sales in millions of dollars.

23:19

S… Speaker 1 (DIPS town hall registrazione)

from the 21-22 budget years until the 26-27 forecast. The 26-27 forecast is kind of that fuzzy bar on the right where I'm not being completely clear because we're doing our budget now, but you'll get some indications here of what it's beginning to look like. The graph shows seamless pipe in green, coating on Tanaris pipe in dark blue, coating sales on third-party pipe in bluish gray, and sales of welded pipe in white with the green outline.

23:50

S… Speaker 1 (DIPS town hall registrazione)

So it's clear when we look into 26, 27, the picture has changed significantly from 25, 26. You can see we're building toward could be a record year for dips. This is due to strong growth in seamless pipe, growth in coding on TNR's pipe, and a very meaningful contribution from ELSA. And a large amount of this activity is projects that we have already booked. So this reflects market reality and the fact that our integrated pipe encoding strategy is working. It's good for TNR's.

24:18

S… Speaker 1 (DIPS town hall registrazione)

it's good for dips it's good for all of us so i assume many of you are now asking okay where is all this business coming from okay so we'll start view of the tenoris pipe mills that we utilize in our business in red uh the offshore pipe coating mills in yellow in the terrace network so dips directly control all of the pipe

24:43

S… Speaker 2 (DIPS town hall registrazione)

coding mills here except for COMFAD in Brazil, and PCN in Nigeria, and PMBNO in Italy. However, we are currently executing projects in both COMFAD, Sacaria 3, and PCN, the Banga North project that I indicated earlier.

25:00

S… Speaker 1 (DIPS town hall registrazione)

Overlaying that, we'll see some projects in green. So all the projects you see here that we have already booked, which will contribute revenue in the current and in the upcoming budget years. Some of these projects have yet to start, some are in full swing, and some will be soon wrapped up. It should be clear, though, that we already have a strong base of awarded projects across all of our regions.

25:24

S… Speaker 1 (DIPS town hall registrazione)

I want to call out a few recent developments that we've squared off here. In the North Sea, the EUA team have had multiple recent wins with Equinor, Acro BP, and others. And this is reestablishing a strong market position in that area and setting us for more awards in the future. So I'm very happy to see our success in the North Sea. In NEA, recent awards have occurred in the last two weeks for projects in Libya and projects in Egypt.

25:52

S… Speaker 1 (DIPS town hall registrazione)

This has been after a very long, very complex set of project pursuits by the team in the Middle East. It was great to see them bring these projects home to see actual purchase orders. And there are still coding scopes on the Libya work and subsequent phases in Libya that we haven't yet did to fight for. So this this area could get very hot. In addition, we're beginning to see the execution in May of the incredible Sakarya phase three project.

26:21

S… Speaker 1 (DIPS town hall registrazione)

That project has three phases, flow lines, risers, and export line. All three of those segments are now underway and will result in a very significant revenue contribution in the coming year with both pipe, making activity, and coating activity, mainly at TCI, some income. And in the West, we're transitioning in Veracruz to the huge Suriname Block 58 Grand Morgue project execution. So we're moving from Guyana into Suriname.

26:50

S… Speaker 1 (DIPS town hall registrazione)

bit of an overlap, but this Surinam project will keep that plant busy for many quarters going forward and we're hoping to have projects awarded for after that and we'll talk about in a little bit. So all these projects give us a real solid foundation for the coming year. Okay, now we overlay the prospective projects that we are currently chasing and hope to win in the coming years. All these in purple are projects that either we have active bids or we're expecting to actively bid very soon.

27:21

S… Speaker 2 (DIPS town hall registrazione)

There's projects in every global region. So we've got a very strong pipeline of opportunities. I'll highlight a few. In the U.S. Gulf, there are a series of deep water projects from BP called Casquita, Tiber, and DC3. So we expect Western Hemisphere to bring these home or the coating of these projects relatively soon, and we will then apply insulation for them at our Channel View facility starting later this year.

27:48

S… Speaker 2 (DIPS town hall registrazione)

In Africa, our EUA team is pursuing the Ultra Deep Water Total Venus Project in Namibia. This has been a very exciting new basin. Venus is the first Namibian project, but we're expecting many. Venus is in over 3,000 meters of water and potentially is one of the largest bundled pipe and insulation projects we have ever seen. If we win this, and I expect we will,

28:11

S… Speaker 2 (DIPS town hall registrazione)

Pipe will come from Dominay and Coding from Veracruz. So hopefully in Veracruz we can do the Guyana projects and we move to the Suriname project and then we go right after that with the Namibia project. We should have some news on our chances on Venus in the coming weeks.

28:26

S… Speaker 2 (DIPS town hall registrazione)

In Cyprus, our NEA team is pursuing a huge gas pipeline development called Kronos, which has been fast-tracked by ENI to take Cyprus gas to Egypt for LNG processing. The project is well-advanced commercially and will be awarded to us directly by ENI. Pipe will come from Dallinay, and our corrosion coding will be done in TCI. Hopefully, we're able to start this project in just a few weeks. I can't overstate how impressed I am.

28:54

S… Speaker 1 (DIPS town hall registrazione)

with both the size of this fast-track project, but also the fact that our team convinced ENI to award it to us without a tender. And staying with ENI, moving to Indonesia, the huge Gang North and IDD projects have now been sanctioned, and they are moving forward with urgency. The pipe and insulation tender is in full swing, and I know that quite a few of you on this call are involved in that effort, so thank you. I'm hearing great things about the quality of this tender.

29:23

S… Speaker 1 (DIPS town hall registrazione)

We're going to leverage our relationship with E&I and our excellent coding facilities in Batam to maximize our participation in the project for both the pipe and the coding. As you can see, there are several other projects that we're chasing all around the world. So again, a target-rich environment. The overall message is the market is improving, our position is strong.

29:43

S… Speaker 1 (DIPS town hall registrazione)

And the work that we're doing now in project execution, early influencing, integrating our teams and our offers is directly positioning us to capture the growth we see. So I hope that gives you a bit of a view of the market.

30:00

S… Speaker 1 (DIPS town hall registrazione)

Hopefully you can feel for me it's a positive situation for us, at least in the coming two to three years, and hopefully on after that. Okay, so with the time I have left, I would like to address the employee opinion survey that we launched and we completed last month. I'm going to provide you an initial look at how Tanaris and how DIP's employees responded on an overall basis.

30:27

S… Speaker 1 (DIPS town hall registrazione)

I think this is one of the most important parts of today's discussion because it reflects what you and your colleagues are experiencing as part of this business. Before we get to the results, I want to quickly level set what the survey is, how it was conducted. I'm sorry if this is a repetition to some of you, but I think it's good to level set. So this is the North's main global tool to collect structured feedback on satisfaction, engagement, overall work experience, and is conducted every two years.

30:56

S… Speaker 1 (DIPS town hall registrazione)

This year's survey was conducted in March and included all employees with at least three months in the company. And importantly, this was the first full survey that included the entire DIPS population following the shop floor integration. We have two separate surveys. We had one for professionals. We had one for shop floor employees. Participation was very strong.

31:18

S… Speaker 1 (DIPS town hall registrazione)

95% across Tenoris, and 91% in dips for professionals, and 80% across Tenoris, and 86% for dips for shop floor employees. So a very, very highly representative data set. People took the time to respond, and I think that matters. The survey was conducted on an external platform called Glint to ensure full anonymity, and it covered 24 questions across six areas.

31:45

S… Speaker 1 (DIPS town hall registrazione)

Clint did tell us that our response rate was the highest of all their customers. So that is certainly a sign of high engagement. So what you're about to see, this reflects real direct input from our teams. So let's get into the results. Okay, I want to start with the Tenaris professional population. So this is all of Tenaris, not just Dips. This is all of us. So we had about 8,000 responses and 45,000 comments.

32:14

S… Speaker 1 (DIPS town hall registrazione)

That's three times the last survey in terms of comments. That shows quite high and quite stable level of engagement. The key takeaways on the positive side is that overall satisfaction is increased for the third survey in a row with this population. Tells us the company is listening and is taking action. In terms of the strengths.

32:35

S… Speaker 1 (DIPS town hall registrazione)

There's a strong pride in working for Tenaris as a world-leading industrial company. There's confidence in our values that I remind you are safety, quality, environment, transparency, community, and diversity, and a belief that the long-term sustainability of the business is very strong. So that's what resonated with people. Psychological safety also scored well, which tells me that people feel like they can speak up.

33:00

S… Speaker 1 (DIPS town hall registrazione)

But we need to improve. And you'll start seeing some trends as I go through the different populations. But recognition, both individual recognition and team recognition needs to be improved. Cross-functional collaboration is an area of focus for Tenaris. But these areas did improve from the last survey. And we also see concerns about the physical working conditions in some areas. Okay. Looking at the shop floor employees across Tenaris.

33:31

S… Speaker 1 (DIPS town hall registrazione)

13,000 responses, 20,000 comments, overall satisfaction dipped, but it remains high at 79%. The strengths are quite consistent, so strong commitments to safety, equality, pride in working for the company, and a positive relationship with local leadership. Shop floor employee areas with lower scores were again focused on recognition, which is coming through on a clear.

33:59

S… Speaker 1 (DIPS town hall registrazione)

recognition for accomplishing tasks, recognition for achieving goals, and also a strong statement that conditions in the facilities, particularly infrastructure like restrooms, lockers, common areas can be improved. This is a theme we'll see in DIPS as well. And we're going to need a specific drill down to understand the locations and teams that are affected because it's coming through loud and loud. Okay. Now the interesting part, how was DIPS opinion versus Tanares overall? Remember,

34:29

S… Speaker 1 (DIPS town hall registrazione)

The results I'm going to show you for DIPS are not representative of everyone on the call. It's only those that are primarily reporting into the DIPS perimeter. For the DIPS professionals, we had 225 responses and over 1,100 comments. Overall satisfaction is 74. Slightly below scenarios overall, but still a solid score. The strengths are pretty clear. Strong psychological safety, illustrating a trust that diverse perspectives are valuable.

35:00

S… Speaker 1 (DIPS town hall registrazione)

value in Tenaris, a good perception of integrity and transparency in this company, a strong sense of purpose in the work that we do. Areas of improvement, though, were quite different depending upon the region, but there were some common themes that came through. Recognition, again, cross-functional collaboration, and some comments that our business was potentially becoming siloed as the functions stopped.

35:29

S… Speaker 1 (DIPS town hall registrazione)

integrating with the businesses. Physical work environment came through also for the DIPS professionals. Better alignment on priorities and workload. And there were also comments on systems and processes introduced during the shocker integration, particularly around the efficiency of those systems and the complexity of the new processes. And I'd like to give a bit of a personal perspective on this.

35:55

S… Speaker 1 (DIPS town hall registrazione)

Many of our people joined Tenaris just over two years ago through the Shawcore integration. And the way of working in Shawcore and the way of working at Tenaris was very different. Tenaris has more structure, more systems, more controls, and that takes time to adapt to. And I experienced it myself.

36:12

S… Speaker 1 (DIPS town hall registrazione)

At the beginning, it felt complex and slow and inefficient and everything was overly controlling. And it really wasn't clear to me in the beginning how to navigate the systems. I couldn't figure out how things really got done in such a bureaucratic environment. But with time, practice and engagement with the systems and the people, it became more manageable and it now works quite well for me. We must understand the company the size of Tenor simply cannot operate on the same rules as a company the size of Shawcore.

36:39

S… Speaker 1 (DIPS town hall registrazione)

More controls, more systems, more structure is necessary and it's inevitable. That said, adaptation goes both ways. There's been examples when DIPs have brought ideas on how to make systems more efficient or more workable without reducing their intent. And the functions have been quite open to improvements where this is possible. So we need to learn a system. We need to be clear where it doesn't work well.

37:04

S… Speaker 1 (DIPS town hall registrazione)

And I really appreciate all the comments on this that came through in the survey. I also, again, appreciate everyone's patience as we all try to get on the same system in the coming months and, frankly, in the coming years. I think I have the actual data for this population versus Tenaris. And so you see Tenaris on the left.

37:26

S… Speaker 1 (DIPS town hall registrazione)

What is called Area Manager Europe. So that's all the businesses and facilities that report in the mechanic, us included, and then dips on the right. And these are the scores on a converted to a hundred point scale. So a hundred is basically a five when you answer the survey. And I would assume a one is probably a 20. And it's quite clear what I said.

37:53

S… Speaker 1 (DIPS town hall registrazione)

color-coded from dark green for good down to, you know, reddish orange for less positive. You can see the working conditions across Tenaris, Area Manager Europe, and Dips is scored the lowest. Recognition across Tenaris, Area Manager, and Dips is close behind.

38:17

S… Speaker 1 (DIPS town hall registrazione)

collaboration, a little bit stronger in DIPs, but across Tenaris, area manager, you know, relatively low scored. So those will be the areas that we will focus on. Okay. Last population we'll look at is the DIPs shop for employees. So these are the teams mainly in the coding plants. So we received 362 responses, 535 comments to the survey this year. This is very high.

38:51

S… Speaker 1 (DIPS town hall registrazione)

participation. We were at 86% in the shop floor employees. So that's very high when we had to get the guys, you know, two terminals, et cetera. And I congratulate all the plants in the HR that facilitated this level of response. Fantastic. Overall satisfaction on the shop floor population was 80%. This is actually higher than the Tenoris average and similar to the overall.

39:17

S… Speaker 1 (DIPS town hall registrazione)

The teams feel positively about the company's commitment to quality and safety on the strengths, and they appreciated their relationship with their site leaders, which I think is a very positive reflection of many of the people on the call right now on those sites. The main areas of focus are very clear. Infrastructure, again, restrooms, locker rooms, dining areas, again came through. We're going to have to accelerate our modernization plans in some of these facilities, and we'll make this an area of very high focus.

39:47

S… Speaker 1 (DIPS town hall registrazione)

Recognition, again, is a theme that our employees will focus on and a strong desire in the shop floor sites for more learning and development opportunities that came through in the comments.

40:00

S… Speaker 1 (DIPS town hall registrazione)

also be a focus in the next year. I'll show you the data. So this one, we don't have AM Europe. It's just Tenaris and Dips. As you can see, infrastructure very, very low in both Tenaris and Dips. The bottom recognition, again, coming through.

40:22

S… Speaker 1 (DIPS town hall registrazione)

And learning and development at the top of the pink, they're also relatively low versus some of the other scores. So what's important is that many of these themes that we just talked about, the recognition, collaboration, working in infrastructure conditions, they appear consistently.

40:44

S… Speaker 1 (DIPS town hall registrazione)

They compare across Tanaris. They appear across DIPs. They tell us these are real topics that deserve better understanding and they deserve action. So what happens next? The results now sit with our local and regional leadership with full visibility of their own data. Local and regional leaders are accountable for going deeper into the feedback, understanding what sits behind it.

41:08

S… Speaker 1 (DIPS town hall registrazione)

And where needed, engaging directly with their teams through focused discussions to make sure we understand the message that we're getting. The expectation is very clear. Each area is going to come back with a small number of focused practical actions that both build on the strengths, but more importantly, address the most important gaps. The objective is not to react to everything we can, but to act on what matters most and to make sure that progress is visible to our employee base.

41:40

S… Speaker 1 (DIPS town hall registrazione)

basically brings the key focus areas I wanted to talk about to a close. Maybe to bring it all together, let's take some takeaways. First, please reinforce to our people to make the right decisions when situations deviate from the normal. We've had too many incidents where decisions resulted in injuries, and I'd like that to stop.

42:07

S… Speaker 1 (DIPS town hall registrazione)

Second, our teams are delivering both our big picture goals, but also more specifically, our local achievements. And we fully recognize and applaud the achievements of our local teams. Third, Dips is in a very strong position. The market ahead of us is improving our project pipeline. Our backlog is strong. The value of combining pipe coding, project execution, technical expertise is becoming clearer to the market every year.

42:34

S… Speaker 1 (DIPS town hall registrazione)

And fourth, the real foundation of this business is not the market, it's actually the people. In both the plants and in the offices and the survey shows that our people care deeply, but they also expect us to keep improving how we operate and their working conditions. So we'll focus on what matters, we'll assign ownership, and we'll make progress visible.

42:59

S… Speaker 2 (DIPS town hall registrazione)

Okay, so that brings me to the end of the material. We do have some time if there are any questions. As a reminder, we'll do the hand raise thing if you'd like to ask something. I'm going to stop sharing for just a moment because I don't think I can see whose hand is raised.

DIPS town hall registrazione

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