Annual Report
2023
TENARIS S.A.
26, Boulevard Royal - 4th Floor
L-2449 - Luxembourg
R.C.S. Luxembourg: B 85203
Annual Report 2023
TABLE OF CONTENTS
LETTER FROM THE CHAIRMAN
CERTAIN DEFINED TERMS
PRESENTATION OF CERTAIN FINANCIAL AND OTHER INFORMATION
CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS
CONSOLIDATED MANAGEMENT REPORT
Key Information
Risk Factors
Information on the Company
Overview
History and Development of the Company
Business Overview
Organizational Structure and Subsidiaries
Operating and Financial Review and Prospects
Overview
Operating Results
Liquidity and Capital Resources
Trend Information
Critical Accounting Estimates
Directors, Senior Management and Employees
Directors and Senior Management
Compensation
Board Practices
Employees
Share Ownership
Major Shareholders and Related Party Transactions
Major Shareholders
Related Party Transactions
Financial Information
Consolidated Statements and Other Financial Information
The Offer and Listing
Offer and Listing Details
Additional Information
Exchange Controls
Taxation
Documents on Display
Quantitative and Qualitative Disclosure about Market Risk
Description of Securities Other Than Equity Securities
American Depositary Shares
Controls and Procedures
Audit Committee Financial Expert
Code of Ethics
Principal Accountant Fees and Services
Purchases of Equity Securities by the Issuer and Affiliated Purchasers
Change in Registrant’s Certifying Accountant
Corporate Governance Statement
Corporate Governance
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Summary of differences with NYSE standards
Cybersecurity
NON-FINANCIAL INFORMATION
FINANCIAL STATEMENTS
Consolidated Financial Statements
Annual Accounts (Luxembourg GAAP)
EXHIBITS
MANAGEMENT CERTIFICATION
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LETTER FROM THE CHAIRMAN
2023 has been an outstanding year for Tenaris with record financial results under most metrics: net sales of $14.9
billion, EBITDA of $4.9 billion, net income of $4.0 billion, operating cash flow of $4.4 billion. As a global supplier
of pipes to the energy industry, we have developed a unique presence in the most challenging developments in
the oil and gas industry, serving its most important players.
With these results and net cash of $3.4 billion in our balance sheet, we are increasing returns to shareholders. We
are proposing to increase our annual dividend to 60 cents per share. Together with the share buyback program
we initiated in November, this would imply an 8% yield to shareholders for the year at current prices.
We have extended the perimeter of our operations through a series of acquisitions. In Saudi Arabia, we increased
our stake in GPC to gain a controlling position in this large diameter welded pipe mill that produces conductor
casing and large diameter line pipe. With the acquisition of the Shawcor pipe coating business, we are
strengthening our line pipe business, especially for offshore line pipe, where Shawcor has a leading position in
anti-corrosive and insulation coatings. In the United States, we increased the flexibility and overall capacity of our
US industrial system by acquiring additional heat treatment and threading facilities. Each of these integrations to
our global industrial system enhances our capacity to serve our wide customer base with a growing range of
products and services.
Our globally integrated industrial and supply chain systems produced and shipped over four million tons of pipes
to customers around the world last year. Many of these pipes are delivered directly to our customer operations in
the field under our Rig Direct® service program that now serves over 500 rigs worldwide.
Under this program, which requires investment in working capital, service yard infrastructure, logistics and digital
systems, we are enhancing customer intimacy and differentiation, adding services to simplify customer operations
and reduce on-site labor requirements. With our Rig Direct® program, which now incorporates our RunReadyTM
service, we are reducing inventories in North America and transforming the supply chain. We are also extending
our Rig Direct® service to other regions around the world.
In the U.S. and Canada, we have strengthened our positioning among large operators. We were recently awarded
a long-term agreement by ExxonMobil to serve their unconventional operations in the United States which
confirms the preference that large operators are giving to our industrial footprint, specialized products and supply
service. We are now serving the ten largest operators in the country, who have maintained a stable level of
operations even as the overall rig count in the U.S. has declined.
Our sales for offshore operations and projects grew more than 50% during the year. In Guyana, where the
development of prolific deepwater reserves is transforming the country, we are serving ExxonMobil’s operations
under a long-term contract, while in Brazil we are supplying Petrobras with a wide range of products for the
Buzios development. We are also supplying a number of offshore gas pipeline projects around the world.
Our sales are growing in the Middle East, where we have increased our local content and presence. In Saudi
Arabia, Aramco, while postponing some of offshore oil expansion plans, is expanding its conventional and
unconventional gas drilling activity. We are supplying premium seamless OCTG following a tender awarded to
replenish depleted stocks and are ramping up deliveries of conductor and surface casing from our local welded
pipe subsidiaries. The growth in gas drilling activity will also provide valuable opportunities for sales of line pipe as
Aramco proceeds with its master gas pipeline program.
We recently inaugurated a new industrial complex in Abu Dhabi, along with officials from ADNOC and the
Ministry of Industry and Advanced Technology. This includes a new premium threading facility, training facilities
and an expanded service yard, which will support the Rig Direct® service we are providing to ADNOC under our
long-term agreement, and contribute to industrial development in the Emirates.
Our industrial system, operating at a high level through the year, has performed well in supporting our global
positioning. In relation to safety, however, we had three fatalities in our operations after four years with none. We
deeply regret the loss of life and are reinforcing our preventive actions with a particular focus on the activities of
contractors working in our system.
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We made a significant advance in our decarbonization program, when, after a $200 million investment, we
successfully put into operation our first wind farm in Argentina. The Buena Ventura wind farm now supplies 100
MW of power, through the interconnected grid, to our industrial facilities in Campana, meeting close to 50% of
its total electric power requirements and contributing to a lower energy costs. We are now moving forward with a
similar investment to build a second wind farm.
Our community education programs, which reach 10,500 students, are also enjoying success in improving
education standards and outcomes. The Roberto Rocca Technical School in Campana, in its tenth year, was
nominated as one of the top ten schools in the world for innovation. Its students, who benefit from the school’s
inclusive approach, comfortably outperform the national private school average in subjects like Maths. Over 90%
of those graduating from the school have entered university and many have additionally obtained attractive job
placements while furthering their education.
As we look forward to 2024, Tenaris, with its extended global reach, enhanced competitive differentiation and
exceptional financial position, is well placed to strengthen its positioning around the world. The current favorable
market conditions in the Middle East and offshore, are expected to continue through the year while, in the
Americas, we are consolidating a solid position ready to seize further opportunities as they arise.
Around the world, demand for primary energy is growing and will continue to grow to meet the needs of
developing countries. The energy transition is advancing with increasing levels of investment in clean energy and
decarbonization of supply chains. Continued investment in oil and gas will also be required for many more years
to accompany this transition and secure affordable energy for all.
I would like to give a special thanks to our employees, without whose continuous efforts and commitment, our
many achievements during 2023 would not have been possible. I would also like to thank our customers,
shareholders and suppliers for the confidence they continue to place in us.
Sincerely,
Paolo Rocca
March 22, 2024
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CERTAIN DEFINED TERMS
Unless otherwise specified or if the context so requires:
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References in this annual report to “the Company” are exclusively to Tenaris S.A., a Luxembourg société
anonyme.
References in this annual report to “Tenaris”, “we”, “us” or “our” are to Tenaris S.A. and its consolidated
subsidiaries. See “II. Accounting Policies A. Basis of presentation” and “II. Accounting Policies B. Group
accounting” to our audited consolidated financial statements included in this annual report.
References in this annual report to “San Faustin” are to San Faustin S.A., a Luxembourg société anonyme
and the Company’s controlling shareholder.
“shares” refers to ordinary shares, par value $1.00, of the Company.
“ADSs” refers to the American Depositary Shares, which are evidenced by American Depositary Receipts,
and represent two shares each.
“OCTG” refers to oil country tubular goods. See “Information on the Company – Business Overview – Our
Products”.
“tons” refers to metric tons; one metric ton is equal to 1,000 kilograms, 2,204.62 pounds, or 1.102 U.S.
(short) tons.
“billion” refers to one thousand million, or 1,000,000,000.
“U.S. dollars”, “US$”, “USD” or “$” each refers to the United States dollar.
“EUR” refers to the Euro.
“ARS” refers to the Argentine peso.
“BRL” refers to the Brazilian real.
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PRESENTATION OF CERTAIN FINANCIAL AND OTHER INFORMATION
Accounting Principles
We prepare our consolidated financial statements in accordance with International Financial Reporting Standards
(“IFRS” or “IFRS Accounting Standards”), as issued by the International Accounting Standards Board (“IASB”),
and in accordance with IFRS, as adopted by the European Union. IFRS differs in certain significant aspects from
generally accepted accounting principles in the United States, commonly referred to as U.S. GAAP. Additionally,
this annual report includes certain non-IFRS alternative performance measures such as EBITDA, Net cash/debt
position and Free Cash Flow. See Exhibit 3 for more details on these alternative performance measures.
We publish consolidated financial statements presented in increments of a thousand U.S. dollars. This annual
report includes our audited consolidated statements of financial position as of 31 December 2023 and 2022, and
the related consolidated income statements, consolidated statements of comprehensive income, consolidated
statements of changes in equity and consolidated statements of cash flows for each of the three years in the
period ended 31 December 2023, including the related notes (collectively referred to as the “consolidated
financial statements”).
Rounding
Certain monetary amounts, percentages and other figures included in this annual report have been subject to
rounding adjustments. Accordingly, figures shown as totals in certain tables may not be the arithmetic
aggregation of the figures that precede them, and figures expressed as percentages in the text may not total
100% or, as applicable, when aggregated may not be the arithmetic aggregation of the percentages that precede
them.
Our Internet Website is Not Part of this Annual Report
We maintain an Internet website at www.tenaris.com. Information contained in or otherwise accessible through
our Internet website is not a part of this annual report. All references in this annual report to this Internet site are
inactive textual references to these URLs, or “uniform resource locators” and are for informational reference only.
We assume no responsibility for the information contained on our Internet website.
This annual report has been prepared in accordance with the European Single Electronic Format (“ESEF”). This
version of the annual report is the only authoritative version, and is available on the Luxembourg Stock Exchange
website: https://my.luxse.com/FIRST
Industry Data
Unless otherwise indicated, industry data and statistics (including historical information, estimates or forecasts) in
this annual report are contained in or derived from internal or industry sources believed by Tenaris to be reliable.
Industry data and statistics are inherently predictive and are not necessarily reflective of actual industry conditions.
Such statistics are based on market research, which itself is based on sampling and subjective judgments by both
the researchers and the respondents, including judgments about what types of products and transactions should
be included in the relevant market. In addition, the value of comparisons of statistics for different markets is
limited by many factors, including that (i) the markets are defined differently, (ii) the underlying information was
gathered by different methods and (iii) different assumptions were applied in compiling the data. Such data and
statistics have not been independently verified, and the Company makes no representation as to the accuracy or
completeness of such data or any assumptions relied upon therein.
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CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS
This annual report and any other oral or written statements made by us to the public may contain “forward-
looking statements” within the meaning of and subject to the “safe harbor” provisions of the Private Securities
Litigation Reform Act of 1995. This annual report contains forward-looking statements, including with respect to
certain of our plans and current goals and expectations relating to Tenaris’s future financial condition and
performance.
Sections of this annual report that by their nature contain forward-looking statements include, but are not limited
to, “Key Information”, “Information on the Company”, “Operating and Financial Review and Prospects”,
“Financial Information” and “Quantitative and Qualitative Disclosure About Market Risk”.
We use words and terms such as “aim”, “will likely result”, “will continue”, “contemplate”, “seek to”, “future”,
“objective”, “goal”, “should”, “will pursue”, “anticipate”, “estimate”, “expect”, “project”, “intend”, “plan”,
“believe” and words and terms of similar substance to identify forward-looking statements, but they are not the
only way we identify such statements. All forward-looking statements are management’s present expectations of
future events and are subject to a number of factors and uncertainties that could cause actual results to differ
materially from those described in the forward-looking statements. These factors include the risks related to our
business and industry discussed under “Key Information – Risk Factors”, including among them, the following:
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our ability to implement our business strategy and to adapt it adequately to the energy transition;
our ability to grow through acquisitions, joint ventures and other investments, or integrate newly acquired
businesses or assets;
our ability to provide value added products and services and price such products and services in accordance
with our strategy;
trends in the levels of investment in oil and gas exploration and drilling worldwide;
the competitive environment or level of consolidation in our business and our industry;
the impact of climate change legislation, including increasing regulatory requirements and extensive
technology and market changes aimed at transitioning to a lower-carbon economy and reducing
greenhouse gas (“GHG”) emissions;
the physical risks resulting from climate change, including natural disasters, increased severity of extreme
weather events, chronic climate changes and long-term shifts in weather patterns;
our ability to absorb cost increases and to secure supplies of essential raw materials and energy;
our ability to adjust fixed and semi-fixed costs to fluctuations in product demand;
the impact of the world’s economy on the energy sector in general, or our business and operations;
general macroeconomic changes, including high inflation rates, inflation containment measures and
foreign exchange measures, as well as, international conflicts, public health epidemics and other political,
social, or economic conditions and developments in the countries in which we operate or distribute pipes,
including developments in connection with the Russia-Ukraine and Middle East armed conflicts; and
changes to applicable laws and regulations, including the imposition of tariffs or quotas or other trade
barriers.
By their nature, certain disclosures relating to these and other risks are only estimates and could be materially
different from what actually occurs in the future. As a result, actual future gains or losses or other occurrences or
developments that may affect our financial condition and results of operations could differ materially from those
that have been estimated. You should not place undue reliance on forward-looking statements, which speak only
as of the date of this annual report. Except as required by law, we are not under any obligation, and expressly
disclaim any obligation to, update or alter any forward-looking statements, whether as a result of new
information, future events or otherwise.
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CONSOLIDATED MANAGEMENT REPORT
Key Information
Risk Factors
You should carefully consider the risks and uncertainties described below, together with all other information
contained in this annual report, before making any investment decision. Any of these risks and uncertainties could
have a material adverse effect on our business, revenues, financial condition and results of operations, which
could in turn affect the price of shares and ADSs.
Risks Relating to Our Business and Industry
Sales and profitability may fall as a result of downturns in the international price of oil and gas and other factors
and circumstances affecting the oil and gas industry
We are a global steel pipe manufacturer with a strong focus on manufacturing products and providing related
services for the oil and gas industry. The oil and gas industry is a major consumer of steel pipe products
worldwide, particularly for products manufactured under high quality standards and demanding specifications.
Demand for steel pipe products from the oil and gas industry has historically been volatile and depends primarily
upon the number of oil and natural gas wells being drilled, completed and reworked, and the depth, length and
drilling conditions of these wells. The level of exploration, development and production activities of, and the
corresponding capital spending by, oil and gas companies, including national oil companies, depends primarily on
current and expected future prices of oil and natural gas and is sensitive to the industry’s view of future economic
growth and the resulting impact on demand for oil and natural gas. Several factors, such as the supply and
demand for oil and gas, the development and availability of new drilling technology, political and global economic
conditions, and government regulations affect these prices. Among others, the following factors have had or are
likely to have an impact on oil and gas prices:
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drilling technology has allowed producers in the United States and Canada to increase production from their
reserves of tight oil and shale gas in response to changes in market conditions more rapidly than in the past;
consolidation in the oil and gas industry is likely to impact prices, with 2023 marking a year of rapid
consolidation in the U.S. oil and gas industry. In October 2023, ExxonMobil (“Exxon”) agreed to acquire
Pioneer Natural Resources for $60 billion, a transaction that would make Exxon the largest operator in the
Permian Basin, the highest producing oil field in the United States; Chevron followed suit by striking a deal to
acquire Hess in a $53 billion transaction that would provide the company with access to reserves in Guyana.
Upstream operators such as Diamondback Energy, Permian Resources, and Ovintiv have also announced
acquisitions in recent months to expand their North American footprint and shale inventory;
government initiatives to reduce GHG emissions, such as the introduction of a carbon tax or carbon-pricing
systems (such as the EU Carbon Border Adjustment Mechanism), the adoption of “cap-and-trade” systems
(such as the EU Emissions Trading System (“ETS”)) or other measures to promote the use of renewable
energy sources, or electric vehicles, are also expected to affect oil and gas prices. For more information on
risks relating to climate change regulations, see “Key Information – Risk Factors – Risks Relating to Our
Business and Industry - Climate change legislation and increasing regulatory requirements aimed at
transitioning to a lower-carbon economy may reduce demand for our products and services and result in
unexpected capital expenditures and costs, and negatively affect our reputation.”
When the price of oil and gas falls, oil and gas companies generally reduce spending on production and
exploration activities and, accordingly, make fewer purchases of steel pipe products. Major oil-and gas-producing
nations and companies have frequently collaborated to balance the supply (and thus the price) of oil in the
international markets. A major vehicle for this collaboration has been the Organization of Petroleum Exporting
Countries (“OPEC”) and many of our customers are state-owned companies in member countries of OPEC, which
plays a significant role in trying to counter falling prices, as was the case in 2020, when the industry was hit by
the effects of the COVID-19 pandemic.
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Climate change legislation and increasing regulatory requirements aimed at transitioning to a lower-carbon
economy may reduce demand for our products and services and result in unexpected capital expenditures and
costs, and negatively affect our reputation
There is an increased attention on GHG emissions and climate change from different sectors of society. The Paris
Agreement, adopted at the 2015 United Nations Climate Conference, sets out the global framework to limit the
rising temperature of the planet and to strengthen the countries’ ability to deal with the effects of climate
change. The EU ETS signaled a major EU energy policy to combat global warming based on a “cap & trade”
program, and the European Green Deal, launched in 2019, focuses on adopting the required policies and
measures aimed at reaching zero GHG emissions in Europe by 2050. The EU taxonomy classification system,
which establishes a list of environmentally sustainable economic activities, is designed to help the EU scale up
sustainable investment and implement the European Green Deal. More recently, the EU adopted the Corporate
Sustainability Reporting Directive (“CSRD”), which requires European large and medium companies and listed
issuers to disclose information on their risks and opportunities arising from social and environmental issues, and
on the impacts of their activities on people and the environment (which, in the case of the Company, will apply
with respect to its 2024 annual report). In the United States, the U.S. Inflation Reduction Act of 2022 calls for a
reduction of carbon emissions by roughly 40% by 2030. Also, in response to an increasing investor focus and
reliance on climate and Environmental, Social and Governance (“ESG”) related disclosure and investment, the U.S.
Securities and Exchange Commission (“SEC”) adopted, in March 2024, climate-related disclosure rules that will
require registrants, including Tenaris from fiscal year 2025, to significantly expand the climate-related disclosures
in their periodic reports, including information about climate-related risks that are reasonably likely to have a
material impact on their business, results of operations, or financial condition, and certain climate-related financial
statement metrics in a note to their audited financial statements. Other countries are introducing or considering
similar measures or regulations, which aim at lowering emissions or which enhance disclosure of climate-related
matters, including carbon emissions. If there is no meaningful progress in lowering emissions in the years ahead,
there is an increased likelihood of abrupt policy interventions as governments attempt to meet their
environmental goals by adopting policy, legal, technology and market changes in the transition to a low-carbon
global economy.
We provide products and services to the oil and gas industry, which accounts, directly and indirectly, for a
significant portion of GHG emissions. Existing and future legislation and regulations related to GHG emissions
(such as increased pricing of GHG emissions and enhanced emissions-reporting obligations) and climate change,
as well as government initiatives to promote the use of alternative energy sources and substitute existing products
and services with lower emissions options (with many jurisdictions implementing tax advantages and other
subsidies to promote the development of renewable energy sources, or even requiring minimum thresholds for
power generation from renewable sources) may significantly curtail demand for and production of fossil fuels,
such as oil and natural gas. These initiatives, together with the growing social awareness regarding climate
change and other environmental matters, have resulted in increased investor and consumer demand for
renewable energy and additional compliance requirements for fossil energy projects, which are likely to become
more stringent over time and to result in substantial increases in costs for the oil and natural gas industry,
potentially leading to write-offs and early retirement of existing assets. Furthermore, ongoing technological
developments in the renewable energy industry are making renewable energy increasingly competitive with fossil-
fuels. If this trend continues, energy demand could shift increasingly towards more environmentally sustainable
sources such as hydroelectrical, solar, wind and other renewable energies, which would, in turn, reduce demand
for oil and natural gas, thus negatively affecting demand for our products and services and, ultimately, our future
results of operations. In addition, adoption of new climate change legislation in the countries in which Tenaris
operates could result in incremental operating costs (such as incremental compliance costs and increased
insurance premiums) and unexpected capital expenditures and, eventually, affect our competitiveness and reduce
our market share. Also, shifts in customer preferences and failure to respond to shareholders’ demand for climate-
related measures and environmental standards could harm our reputation, adversely affect the ability or
willingness of our customers or suppliers to do business with us, negatively impact workforce management and
planning, erode stakeholder support and restrict or reduce access to financial resources. For more information on
Tenaris’s climate change initiatives, please see “Operating and Financial Review and Prospects – Overview –
Climate Change”.
The physical risks resulting from climate change, including extreme weather conditions and shifts in weather
patterns, have in the past and may in the future adversely affect our operations and financial results
Our business has been, and in the future could be, affected by severe weather in areas where we operate, which
could materially affect our operations and financial results. Extreme weather conditions and natural disasters such
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as hurricanes, extreme wind, flooding or coastal storm surges have resulted, and may in the future result, in the
shutdown of our facilities, evacuation of our employees, and activity disruptions at our clients’ well-sites or in our
supply chain. For example, the severe freeze in the United States and Mexico in early 2021, caused gas and power
shortages in Texas, resulting in additional costs and production disruptions and losses.
Chronic climate changes, such as changes in precipitation patterns and rises in average temperatures and sea
levels, may result in increased operating costs or capital expenditures due to supply shortages or damage to
facilities, higher insurance premiums or reduced availability of insurance, decreases in revenue derived from lower
production capacity, and write-offs or early retirement of assets, all of which could adversely affect our financial
condition, results of operations and cash flows. For more information on Tenaris’s climate change initiatives,
please see “Operating and Financial Review and Prospects – Overview – Climate Change”.
Competition in the global market for steel pipe products may cause us to lose market share and hurt our sales
and profitability
The global market for steel pipe products is highly competitive, with the primary competitive factors being price,
quality, service and technology. In recent years, substantial investments have been made, especially in China but
also in the United States and the Middle East, to increase production capacity of seamless steel pipe products, and
as a result there is significant excess production capacity, particularly for “commodity” or standard product
grades. Production capacity of more specialized product grades has also increased. At the same time, the high
cost and long lead times required to develop the most complex projects, particularly deepwater projects, led to a
slowdown in new developments in a context of low and more volatile oil prices. Despite our efforts to develop
products and services that differentiate us from our competitors, reduced demand for steel pipe products from
these complex projects means that the competitive environment is expected to remain intense in the coming years
and our effective competitive differentiation, together with our ability to vertically integrate and to provide value
added services, will be key success factors. In addition, there is a risk of unfairly traded steel pipe imports in
markets in which Tenaris produces and sells its products, and we can give no assurance with respect to the
application of antidumping duties and tariffs or the effectiveness of any such measures.
Our sales may be affected as a result of antidumping and countervailing duty proceedings or by the imposition of
other import restrictions or local content requirements
Because of the global nature of our operations, we export and import products from several countries and, in
many jurisdictions, we supplement domestic production with imported products. We import OCTG from
Argentina and Mexico to complement our significant and growing production in the United States. From time to
time, local producers seek the imposition of import restrictions or the initiation of antidumping or countervailing
duty proceedings. For example, in October 2021, the U.S. Department of Commerce (“DOC”) initiated
antidumping duty investigations of OCTG imports from Argentina, Mexico, and Russia and countervailing duty
investigations of OCTG imports from Russia and South Korea, which resulted in a determination by the
International Trade Commission (“ITC”), issued in October 2022, that the imports under investigation caused
injury to the U.S. OCTG industry, bringing the investigation phase to a conclusion. Although Tenaris and other
parties have appealed the agencies’ determinations from the investigation to the Court of International Trade,
Tenaris is required to pay antidumping duty deposits while the order is in effect. For more information on this
matter, please refer to note 27 “Contingencies, commitments and restrictions to the distribution of profits” to our
audited consolidated financial statements included in this annual report. Antidumping or countervailing duty
proceedings, any resulting penalties or any other form of import restriction have in the past impeded, and may in
the future restrict, our access to important export markets for our products, thereby adversely impacting our sales
or limiting our opportunities for growth.
In addition, several jurisdictions have begun to impose or expand local content requirements. For example, in
recent years Saudi Arabia has implemented various measures aimed at increasing local content particularly from
suppliers to state-owned companies such as Saudi Arabian Oil Company (“Saudi Aramco”) and we can expect
that measures favoring the development of local production will increase as Saudi Arabia seeks to create
employment opportunities for its citizens and diversify its economy away from its dependence on oil and gas
production. Other countries, such as Brazil, Ecuador, Indonesia, Nigeria and the United Arab Emirates, have also
put in place significant local content requirements. Other mechanisms, such as Europe’s Carbon Border
Adjustment Mechanism (“CBAM"), could have a similar impact. For more information, see “Key Information –
Risk Factors – Risks Relating to Our Business and Industry - The cost of complying with environmental regulations
and potential environmental and product liabilities may increase our operating costs and negatively impact our
business, financial condition, results of operations and prospects”. If countries impose or expand local content
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requirements or put in place regulations limiting our ability to import certain products, our competitive position
could be negatively affected. Therefore, if any of these risks materialize, we may not continue to compete
effectively against existing or potential producers and preserve our current shares of geographic or product
markets, and increased competition may have a material impact on the pricing of our products and services,
which could in turn adversely affect our revenues, profitability and financial condition.
Our sales may also be affected as a result of other international trade regulations
The shipment of goods and services across international borders subjects us to extensive trade laws and
regulations. Our import and export activities are governed by customs laws and regulations in each of the
countries where we operate. Moreover, the European Union, the United States and other countries control the
import and export of certain goods and services and impose related import and export recordkeeping and
reporting obligations. Those governments have also imposed economic sanctions against certain countries,
persons and other entities, such as sanctions that restrict or prohibit transactions involving Iran, Syria, Venezuela
and Russia or their citizens or companies. For more information on the impact on our business of the sanctions on
Russia as a result of the armed conflict in Ukraine, see “Risks Relating to Our Business and Industry – An
escalation of the Russia-Ukraine war and other armed conflicts may adversely affect our operations”. Similarly, we
are subject to the U.S. anti-boycott laws. Trade laws and regulations are complex and frequently changing, and
they may be enacted, amended, enforced or interpreted in a manner that could materially impact our operations.
For example, in March 2018, under Section 232 of the Trade Expansion Act of 1962 (“Section 232”), the United
States imposed a 25% tariff on steel articles imported from all countries, with the exemption of Canada and
Mexico, as member states of the USMCA, and imports of steel tubes from Australia, Argentina, Brazil and South
Korea (the latter three with specific quotas per product). The U.S. government has granted successive exemptions
on imports from Italy, Mexico, Romania and Argentina, of steel billets to be used at our Bay City mill, with the
latest being granted in December 2023 for the import of 200,000 tons from Argentina, Italy and Romania.
Exemptions are granted only for a one-year term and future requests might not be granted, thus adversely
affecting our operations or revenues. On October 31, 2021, the United States and the EU reached an agreement
whereby Section 232 tariffs were replaced with tariff-rate quotas for steel melted and poured in Europe starting
on January 1, 2022, and steel products imported from the EU for a period of two calendar years (i.e., until 31
December 2023) without the need to reapply. This agreement allows Tenaris to import, through December 31,
2023, up to 299,376 tons of billets from Italy and Romania without paying the 25% annual tariff. On December
28, 2023, the United States renewed this agreement allowing Tenaris to import, through December 31, 2025, up
to 419,749 tons of billets from Italy and Romania per year without paying the 25% tariff. There is no guarantee
that additional tariffs on steel exports to the U.S. market will not be reimposed in the future. Failure to comply
with applicable trade regulations could also result in criminal and civil penalties and sanctions.
Increases in the cost of raw materials, energy and other costs, limitations or disruptions to the supply of raw
materials and energy, and price mismatches between raw materials and our products may hurt our profitability
The manufacture of seamless steel pipe products requires substantial amounts of steelmaking raw materials and
energy; welded steel pipe products, in turn, are processed from steel coils and plates. The availability and pricing
of a significant portion of the raw materials and energy we require are subject to supply and demand conditions,
which can be volatile, and to tariffs and other government regulations, which can affect continuity of supply and
prices. In addition, disruptions, restrictions or limited availability of energy resources in markets where we have
significant operations could lead to higher costs of production and eventually to production cutbacks at our
facilities in such markets. For example, in early 2021 we suffered gas and power shortages in Texas caused by a
severe freeze affecting the United States and Mexico, which resulted in additional costs and production losses.
Also, the Russian invasion of Ukraine in 2022, resulted in a spike in European energy costs. Additionally, in early
2024, we experienced some delays in the delivery times to our customers in relation to orders that had to be
diverted because of the ongoing shipping crisis in the Red Sea.
At any given time, we may be unable to obtain an adequate supply of critical raw materials with price and other
terms acceptable to us. The availability and prices of raw materials may also be negatively affected by new laws
and regulations, including import controls, sanctions and other trade restrictions, allocation by suppliers,
interruptions in production, accidents or natural disasters, armed conflicts, chronic climate change, changes in
exchange rates, worldwide price fluctuations, and the availability and cost of transportation. For further
information related to the impact on our business of the armed conflict in Ukraine, see “Key Information – Risk
Factors – Risks Relating to Our Business and Industry – An escalation of the Russia-Ukraine war and other armed
conflicts may adversely affect our operations”. Raw material and energy prices could also be affected by the
introduction of carbon prices or taxes, or as a result of changes in production processes, such as an increased use
of metal scrap, adopted by steelmaking companies seeking to reduce carbon emissions. In addition, we may not
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Annual Report 2023
be able to recover, partially or fully, increased costs of raw materials and energy through increased selling prices
for our products, or it may take an extended period of time to do so, and limited availability could force us to
curtail production, which could adversely affect our sales and profitability.
Our results of operations and financial condition could be adversely affected by low levels of capacity utilization or
failure to retain qualified workforce
Like other manufacturers of steel-related products, we have fixed and semi-fixed costs (e.g., labor and other
operating and maintenance costs) that cannot adjust rapidly to fluctuations in product demand for several
reasons, including operational constraints and regulatory restrictions. If demand for our products falls significantly,
or if we are unable to operate due to, for example, governmental measures or unavailability of workforce, these
costs may adversely affect our profitability and financial condition. For example, in response to the abrupt and
steep downturn of the oil and gas industry resulting from the oil crisis and the COVID-19 pandemic in 2020, we
were required to implement cost-containment measures and liquidity preservation initiatives, including reduction
of our operating activities in several jurisdictions, temporary closure of facilities in the United States and review
of our capital expenditure plans. Temporary suspensions of operations or closure of facilities generally lead to
layoffs of employees, as was our case during the oil crisis and the COVID-19 pandemic, which may in turn give
rise to labor conflicts and impact operations. Cost containment measures may also affect profitability and result in
charges for asset impairments. In turn, in times of economic growth and high demand for our products we may
not be able to retain qualified workforce or hire additional employees soon enough. For example, during the post-
pandemic recovery period, when we brought production at our Bay City mill to full capacity, we faced some
difficulties in hiring skilled workers. Moreover, certain consequences of climate change, such as shifts in customer
preferences, stigmatization of our industry or failure to respond to shareholder demands for climate-related
measures could negatively impact workforce management and planning, adversely affecting employee attraction
and retention.
Adverse economic or political conditions in the countries where we operate or sell our products and services may
decrease our sales or disrupt our manufacturing operations, thereby adversely affecting our revenues, profitability
and financial condition
We have significant operations in various countries, including Argentina, Brazil, Canada, China, Colombia,
Indonesia, Italy, Mexico, Nigeria, Romania, Saudi Arabia, the United Arab Emirates and the United States, and we
sell our products and services throughout the world. Therefore, like other companies with worldwide operations,
our business and operations have been, and could in the future be, affected from time to time to varying degrees
by political, economic, social and public health developments and changes in laws and regulations. These
developments and changes may include, among others, nationalization, expropriation or forced divestiture of
assets; restrictions on production, imports and exports; antidumping or countervailing duties; travel,
transportation or trade bans; interruptions in the supply of essential energy inputs; currency exchange and/or
transfer restrictions, inability or increasing difficulties to repatriate income or capital or to make contract
payments; inflation; devaluation; war or other armed conflicts (including the Russia-Ukraine armed conflict and
regional conflicts in the Middle East and Africa); civil unrest and local security concerns, including high incidences
of crime and violence involving drug trafficking organizations that threaten the safe operation of our facilities and
operations; direct and indirect price controls; tax increases (including retroactive) and changes in the
interpretation, application or enforcement of tax laws and other claims or challenges; cancellation of contract or
property rights; and delays or denials of governmental approvals. Both the likelihood of such occurrences and
their overall impact upon us vary greatly from country to country and are not predictable. Realization of these
risks could have an adverse impact on the results of operations and financial condition of our subsidiaries located
in the affected country and, depending on their materiality, on the results of operations and financial condition of
Tenaris as a whole.
More specifically, Argentina and Mexico are countries in which we have significant operations and relevant risks.
Our business and operations in Argentina may be materially and adversely affected by economic, political, social,
fiscal and regulatory developments, including the following:
• Macroeconomic and political conditions in Argentina may adversely affect our business and operations. In
December 2023, a new administration, led by President Javier Milei, took office in Argentina and announced
a series of emergency measures to address the current critical economic situation with the objective of
improving the macroeconomic situation and opening the Argentine economy. Certain measures were
challenged in court by affected sectors. In addition, the new administration is struggling to get Congress’s
approval for most of its reform proposals. It is uncertain the extent to which the Argentine government will
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Annual Report 2023
be able to implement its program, which requires major structural reforms, or adopt the announced
measures, marked by a majority in the Congress unwilling to endorse and support the new government’s
reforms, heightened conflict between the national government and provincial governors, court decisions
setting aside some of the governmental measures, resistance by social and union leaders and general social
and political unrest. Adverse economic and political conditions could cause a drop in demand for our
products in the domestic market, adversely affecting our operations and financial results. Similarly, they
could also negatively impact the business and operations of our customers (oil and gas companies operating
in Argentina) and consequently our revenues and profitability.
• Our business and operations in Argentina may be adversely affected by high inflation or by the measures
that may be adopted by the government to address inflation. In particular, increases in services and labor
costs could affect cost-competitiveness and margins, negatively impacting our results of operations. An
economic environment characterized by high inflation could undermine Argentina’s foreign competitiveness
in international markets and negatively affect economic activity and employment levels. Argentine inflation
rate volatility makes it impossible to estimate with reasonable certainty the extent to which our activity levels
and results of operations could be affected in the future. In addition, an increased level of labor demands in
response to spiraling inflation could trigger higher levels of labor conflict, and eventually result in strikes or
work stoppages involving our operations or those of our suppliers and customers. Any such disruption of
operations could have an adverse effect on our operations and financial results.
• Other events that may have an adverse effect on our operations and financial results include increased taxes,
currency devaluation, exchange controls, restrictions on capital flows and export and import taxes or
restrictions. Between September 2019 and December 2023, the Argentine government imposed significant
restrictions on foreign exchange transactions; however, the new administration eased certain restrictions and
other changes to such regulations are expected. At the date of this annual report, the application of existing
foreign exchange regulations remains uncertain, as is the scope and timing of upcoming changes. Currently,
Argentine companies are required to repatriate export proceeds from sales of goods and services (including
U.S. dollars obtained through advance payment and pre-financing facilities) and convert such proceeds into
ARS at the official exchange rate. As from December 13, 2023, up to 20% of export proceeds can be sold
for Argentine pesos through securities transactions resulting in a higher implicit exchange rate. This
percentage has changed and is expected to change over time. Sovereign bonds were issued to pay imports
of goods cleared and services rendered on or prior to December 12, 2023, but such bonds cover only a
portion of the total import debts. Import payments for services rendered and goods cleared after December
12, 2023, do not require government approval but cannot be paid in advance or at sight and are subject to
deferred payment schedules. In addition, import payments are subject to import taxes that significantly
increase prices of imported goods and services. Argentine companies must still obtain prior Central Bank
authorization, which is rarely (if ever) granted, to access the foreign exchange market to make dividend
payments. For additional information on current Argentine exchange controls and restrictions, see
“Additional Information – Exchange Controls – Argentina” and note 29 “Foreign exchange control measures
in Argentina” of our audited consolidated financial statements included in this annual report. The existing
measures limit the ability of Argentine companies to obtain foreign currency and make certain payments and
distributions out of Argentina at the official exchange rate. If control systems are maintained or are
tightened, our operations could be adversely affected. Given that the volatile and uncertain environment
remains as of the date of this annual report, additional regulations or restrictions could further restrict our
ability to access the official foreign exchange market, expose us to the risk of losses arising from fluctuations
in the exchange rate between the ARS and the USD, cause disruptions to our operations due to lack of
imported raw materials and other inputs, affect our ability to finance and even carry out major investments
in Argentina, and/or impair our ability to convert and transfer outside the country funds generated by
Argentine subsidiaries to pay dividends or royalties or make other offshore payments.
•
In recent years, our operations in Argentina experienced constraints in their electricity and natural gas supply
requirements on many occasions. Shortages of energy and natural gas in Argentina have led in the past (and
could lead in the future) to production cutbacks negatively affecting our revenues and profitability; we could
also face increased costs when using alternative sources of energy.
In Mexico, our business could be materially and adversely affected by economic, political, social, fiscal and
regulatory developments, including the following:
•
The Mexican government exercises significant influence over the Mexican economy and, therefore,
governmental actions concerning the economy and state-owned enterprises could have a significant impact
on Mexico’s private sector and on our Mexican-related operations.
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Annual Report 2023
• We maintain a strong, longstanding relationship with Petróleos Mexicanos (“Pemex”), one of the world’s
largest crude oil and condensates producers and one of our largest customers. Over the past several months,
Pemex has delayed payments beyond the agreed-upon due dates, resulting in a significant credit exposure to
Pemex, which represented approximately 20% of our overall credit exposure as of December 31, 2023.
Historically we have not had any material write-offs due to uncollectible accounts receivable relating to this
customer. Although we are in continuous conversations and Pemex is making partial payments on a periodic
basis, at this stage we cannot predict whether or not our exposure to Pemex will be reduced, or the timing
for any such reduction. If we are not able to reduce our exposure to Pemex and Pemex defaults on its
payments, our revenues and profitability would be adversely affected.
•
•
Our Mexican operations could also be affected by criminal violence, primarily due to the activities of drug
cartels and related organized crime which has been increasing in Mexico over the last years. Although the
Mexican government has implemented various security measures and has strengthened its military and police
forces, drug-related crime continues to exist in Mexico. Our business may be materially and adversely
affected by these activities, their possible escalation and the violence associated with them.
In the last few years, the Mexican government made various attempts to modify rules and regulations
governing the energy market in Mexico with potential impact on energy supply and its cost. Since December
2018, the Mexican government has introduced numerous changes to electricity regulations, including a
March 2021 amendment to the Energy Industry Law (“LIE”), and a bill to reform the Constitution, filed in
October 2021 but then rejected by the Mexican Congress, which would have practically nationalized the
electricity industry. These changes are part of Mr. López Obrador’s crusade against the previous
administration’s 2013 energy reform and seek to grant priority to Mexico’s state-owned electric power
generation and distribution company (“CFE”), over private generators in the supply of electric power to the
Mexican market and mandate a revision of power generation and transaction agreements between CFE and
independent electric power suppliers. The intended reforms were challenged in court by certain members of
the Senate and by affected companies, many of which sought and obtained injunctive relief. In January
2024, the Supreme Court ruled against the constitutionality of certain provisions of the LIE reform. In
response, the Mexican President announced a new proposal for an ambitious constitutional reform, which
covers a wide range of topics, including energy matters, with the intention of granting state-owned
companies, particularly CFE and Pemex, priority over private companies on electricity dispatch. Uncertainty
remains as to whether this new constitutional reform will be approved or if any new reforms will be
introduced to the energy market rules and regulations, particularly in the context of the upcoming
presidential elections. Any such new amendment or measures could negatively affect the operations of
Tubos de Acero de Mexico S.A. (“Tamsa”) or Techgen S.A. de C.V. (“Techgen”), the power plant in which
Tenaris holds a 22% equity interest and which supplies electricity for most of our Mexican operations. At this
stage, we cannot assess the potential effects of any new governmental initiative on the Mexican economy in
general, and particularly on our local operations and, consequently, on the results of operations and financial
conditions of our businesses in Mexico.
•
In the past, our operations in Mexico were disrupted due to union-led stoppages resulting from an internal
dispute within the local union. Although our Mexican operations have not experienced any further
disruptions caused by employee stoppages since 2020, we cannot assure that further disruptions will not
occur in the future. Any future stoppage, strike, disruption of operations or new collective bargaining
agreements could result in lost sales and could increase our costs, thereby affecting our results of operations.
An escalation of the Russia-Ukraine war and other armed conflicts may adversely affect our operations
In February, 2022, Russia launched a military attack on Ukraine. In response, the United States, the European
Union and the United Kingdom, among other countries, have imposed a wave of sanctions against certain
Russian institutions, companies and citizens. The Russian Government has retaliated by banning airlines from its
airspace and has ordered economic counter measures, including restrictions on residents transferring foreign
currency abroad. It has been two years since the conflict began and any resolution and timing thereof still remains
uncertain. Russia is a major supplier of oil and gas in Europe and worldwide, and Russia and Ukraine are both
major global suppliers of internationally traded steelmaking raw materials and semi-finished steel products. As a
result of the armed conflict and related sanctions, energy and commodity prices spiked upwards and foreign trade
transactions involving Russian and Ukrainian counterparties have been severely affected. A long-standing conflict
makes it hard to predict how energy and commodity prices will continue to behave as higher prices and possible
shortages of energy and raw materials used in our steelmaking operations (including natural gas and electric
energy, particularly in Europe, steel scrap, pig iron, direct reduced iron (“DRI”), hot briquetted iron (“HBI”),
ferroalloys, steel bars, coils and plates) would result in higher production costs and potential plant stoppages,
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Annual Report 2023
affecting our profitability and results of operations. As a result of existing or future economic sanctions imposed
on Russia, we or our contractors (including shipping companies) may not be able to continue purchasing products
from, or making payments to, Ukrainian or Russian suppliers or counterparties; and we may not be able to
promptly procure such raw materials from other suppliers, or we may be required to purchase raw materials at
increased prices.
We have suspended any sales to Russian customers or purchases from Russian suppliers that would breach
applicable sanctions, and we have closed our representative office in Moscow. Furthermore, in March 2022, we
recorded an impairment in the amount of approximately $14.9 million, fully impairing our investment in our joint
venture in Russia with Severstal.
Other ongoing armed conflicts, including the Middle East conflict and the ongoing shipping crisis in the Red Sea,
may disrupt our operations, increase our costs, and adversely affect our delivery times.
If we do not successfully implement our business strategy, our ability to grow, our competitive position and our
sales and profitability may suffer
We plan to continue implementing our business strategy of consolidating our position as a leading global supplier
of integrated product and service solutions to the energy and other industries and adapting to the energy
transition through reducing the carbon emissions in our operations and developing and supplying products and
services for low-carbon energy applications, as well as continuing to pursue strategic investment opportunities.
Any of the components of our overall business strategy could cost more than anticipated (including as a result of
increasing regulatory requirements aimed at transitioning to a lower-carbon economy), may not be successfully
implemented or could be delayed or abandoned. For example, we may fail to create sufficient differentiation in
our Rig Direct® services to compensate the added costs of providing such services, or fail to find suitable
investment opportunities, including acquisition targets that enable us to continue to grow and maintain or
improve our competitive position.
In addition, acquisitions may be subject to challenges or investigations by governmental authorities, including
antitrust and consumer-protection authorities. The costs of complying with authorization or investigation
procedures may be significant. Also, antitrust authorities are looking very closely at the effects of acquisitions and
may deny authorizations, impose conditions that may result in significant costs or deprive Tenaris of the
advantages and expected synergies of acquisitions, or initiate investigation upon challenges brought by third
parties. Challenges to acquisitions or other investments, and failure to obtain, or conditions imposed for the
granting of, authorizations may prevent or delay transactions, which could have an adverse effect on our financial
condition and results of operations.
Even if we successfully implement our business strategy, it may not yield the expected results, or decisions by our
joint venture partners may frustrate our initiatives. For example, we were forced to terminate our joint venture
with JFE Holdings Inc. (“JFE”) with respect to NKKTubes K.K. (“NKKTubes”) as a result of JFE’s unilateral decision
to close down operations at one of its steel complexes. For further information on the termination of the
NKKTubes joint venture, please refer to note 36 “Termination of NKKTubes joint venture” to our audited
consolidated financial statements included in this annual report.
Future acquisitions, strategic partnerships and capital investments may not perform in accordance with
expectations or may disrupt our operations and hurt our profits
One element of our business strategy is to identify and pursue growth-enhancing strategic opportunities. As part
of that strategy, we regularly make significant capital investments and acquire interests in, or businesses of,
various companies. Consistent with our growth strategy, we intend to continue considering strategic acquisitions,
investments and partnerships from time to time to expand our operations and establish a local presence in our
markets. We must necessarily base any assessment of potential acquisitions, joint ventures and capital investments
on assumptions with respect to timing, profitability, market and customer behavior and other matters that may
subsequently prove to be incorrect. For example, we negotiated the terms for our $1.0 billion acquisition of IPSCO
Tubulars Inc. (“IPSCO”) in early 2019 based on assumptions made at that time, but due to the length of the
antitrust review process, we were able to complete the acquisition only in 2020 under materially worse market
circumstances. Our past or future acquisitions, significant investments and alliances may not perform in
accordance with our expectations and could adversely affect our operations and profitability. In addition, new
demands on our existing organization and personnel resulting from the integration of new acquisitions could
disrupt our operations and adversely affect our operations and profitability. Moreover, as part of future
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Annual Report 2023
acquisitions, we may acquire assets that are unrelated to our business, and we may not be able to integrate these
assets or sell them under favorable terms and conditions. For example, in November 2023, Tenaris completed the
acquisition of Mattr Corporation’s (“Mattr”) pipe coating business unit. The acquired business includes nine
plants located in Canada, Mexico, Norway, Indonesia, the United Arab Emirates and the United States, and several
mobile concrete plants. The business also includes world-class R&D facilities in Toronto and Norway and a wide
intellectual property product portfolio. The integration of the newly acquired business is expected to present
particular challenges considering that the acquired business operations are spread over many jurisdictions, the
acquisition results in the addition of nearly 2,800 employees to our workforce, and existing systems and processes
need to be integrated into those of Tenaris.
Disruptions to our manufacturing processes could adversely impact our operations, affect customer service levels
or our reputation, or expose us to liability and, consequently, adversely affect our financial results
Our steel pipe manufacturing processes depend on the operation of critical steelmaking equipment, such as
electric arc furnaces (“EAF”), continuous casters, rolling mills, heat treatment and various operations that support
them, such as our power generation facilities. Despite the investments we make to maintain critical production
equipment, such equipment may incur downtime as a result of unanticipated failures or other events, such as
fires, explosions, floods, earthquakes, accidents and severe weather conditions.
Similarly, natural disasters or severe weather conditions, including those related to climate change, could
significantly damage our production facilities and general infrastructure or affect the normal course of business.
For example, our Mexican production facility located in Veracruz is located in a region prone to earthquakes, and
our Bay City facility in Texas, United States is located in an area prone to strong winds and hurricanes, and
occasional floods. More generally, changing weather patterns and climatic conditions in recent years have added
to the unpredictability and frequency of natural disasters. For more information on the risks associated with
climate-change, see “Key Information – Risk Factors – Risks Relating to Our Business and Industry – The physical
risks resulting from climate change, including extreme weather conditions and shifts in weather patterns, have in
the past and may in the future adversely affect our operations and financial results”.
Our operations may also be adversely affected as a result of work stoppages or other labor conflicts. In the past,
our operations in Mexico were disrupted due to union-led stoppages resulting from an internal dispute within the
local union. Although our Mexican operations have not experienced any further disruptions caused by employee
stoppages since 2020, we cannot assure that further disruptions will not occur in the future. In addition, in some
of the countries in which we have significant production facilities (e.g., Argentina and Brazil), significant
inflationary pressures and higher tax burdens could increase labor demands and could eventually generate higher
levels of labor conflicts, which may result in operational disruptions.
In addition, epidemics and other public health crises may disrupt our operations, as was the case during 2020 as a
result of the COVID-19 outbreak when some of our facilities or production lines were closed or shutdown.
Some of the previously described emergency situations could result, and in some cases have resulted, in damage
to property, delays in production or shipments and death or injury to persons.
Any of the foregoing could expose us to liability and affect our reputation. To the extent that lost production or
delays in shipments cannot be compensated for by unaffected facilities, such events could have an adverse effect
on our profitability and financial condition. Additionally, we do not carry business interruption insurance, and the
insurance we maintain for property damage and general liability may not be adequate or available to protect us
under such events, its coverage may be limited, or the amount of our insurance may be less than the related loss.
For more information on our insurance coverage, see “Information on the Company – Business overview –
Insurance”.
We may be required to record a significant charge to earnings if we must reassess our goodwill or other assets as
a result of changes in assumptions underlying the carrying value of certain assets, particularly as a consequence of
deteriorating market conditions
Assets that are subject to amortization are reviewed for impairment whenever events or changes in circumstances
indicate that the carrying amount may not be recoverable. Intangible assets with indefinite useful life, including
goodwill, are subject to impairment tests following IAS 36. Impairment tests have resulted in impairment charges.
Impairment charges for the last three years are shown below:
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Annual Report 2023
•
•
•
•
In December 2021, we recorded a charge of $57 million in connection with the expected termination of the
NKKTubes joint venture.
In March 2022, in light of the armed conflict in Ukraine and the designation of Severstal’s controlling
shareholder as a person subject to EU and UK sanctions, we recorded an impairment in the amount of
approximately $14.9 million, fully impairing our investment in our joint venture in Russia with Severstal. For
more information on Tenaris’s operations involving Russia, see “Key Information – Risk Factors – Risks
Relating to Our Business and Industry – An escalation of the Russia-Ukraine war and other armed conflicts
may adversely affect our operations”.
In September 2022, mainly due to the lower expectations for steel demand and market steel prices in Brazil,
together with a worsened global macroeconomic situation that derived in an increase in discount rates, we
wrote down our investment in Usinas Siderúrgicas de Minas Gerais S.A.(“Usiminas”) by $19.1 million, and in
September 2023, we recorded a net loss of $25.5 million, related to the participation increase in Usiminas.
In December 2022, in the presence of impairment indicators, the Company conducted impairment tests,
reviewed the values of certain idle assets in its subsidiaries and recorded impairment charges of $76.7
million.
As of December 31, 2023, goodwill amounted to $1,104 million corresponding mainly ($920 million) to the
acquisition of Hydril Company (“Hydril”) in 2007 and is allocated to Hydril, Siderca and Tamsa cash generating
units (“CGU”).
For more information on impairment charges, please refer to note 5 “Impairment charge”, note 8 “Equity in
earnings of non-consolidated companies” and note 14 “Investments in non-consolidated companies” to
our audited consolidated financial statements included in this annual report.
Our results of operations and financial condition could be adversely affected by movements in exchange rates
As a global company, we manufacture and sell products throughout the world and a portion of our business is
carried out in currencies other than the U.S. dollar, which is the Company’s functional and presentation currency.
As a result, we are exposed to foreign exchange rate risk. Changes in currency values and foreign exchange
regulations could adversely affect our financial condition and results of operations. For information on our foreign
exchange rate risk, please see “Quantitative and Qualitative Disclosure About Market Risk – Foreign Exchange
Rate Risk”.
Changes in applicable tax regulations and resolutions of tax disputes could negatively affect our financial results
We are subject to tax laws in numerous foreign jurisdictions where we operate. The integrated nature of our
worldwide operations can produce conflicting claims from revenue authorities in different countries as to the
profits to be taxed in the individual countries, including disputes relating to transfer pricing. Most of the
jurisdictions in which we operate have double tax treaties with foreign jurisdictions, which provide a framework
for mitigating the impact of double taxation on our results. However, mechanisms developed to resolve such
conflicting claims are largely untried and can be expected to be very lengthy.
In recent years, tax authorities around the world have increased their scrutiny of companies’ tax filings and have
become more rigid in exercising any discretion they may have. As part of this, in 2015, the Organization for
Economic Co-operation and Development (“OECD”) proposed a number of tax law changes under its Base
Erosion and Profit Shifting (“BEPS”) Action Plans to address issues of transparency, coherence and substance.
Most of the countries in which we operate have already implemented those changes within their own domestic
tax legislations.
In 2019, the OECD launched a new initiative on behalf of the G20 under the format of a two pillars solution: Pillar
One, aimed at minimizing profit shifting by working towards a global tax framework that ensures that corporate
income taxes are paid where consumption takes place, and Pillar Two, aimed at introducing a global standard on
minimum taxation, both combined with new tax dispute resolution processes. This project achieved OECD political
consensus in October 2021. Detailed principles on Pillar One are still under discussion.
In December 2021, the OECD released the Pillar Two model rules (the Global Anti-Base Erosion rules, or “GloBE”)
to reform international corporate taxation. Following Pillar Two OECD’s initiative, the European Union adopted in
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Annual Report 2023
December 2022 a directive to impose a global minimum taxation for multinational companies in the Union, to be
effective as from January 1, 2024.
On December 20, 2023, the Luxembourg Parliament approved the Pillar Two law transposing the EU Pillar Two
Directive into domestic legislation. The law takes effect beginning in fiscal years starting on or after December 31,
2023.
The Company is within the scope of the rules, and therefore will be required to calculate its GloBE effective tax
rate for each jurisdiction where it operates and will be liable to pay a top-up tax for the difference between its
GloBE effective tax rate per jurisdiction and the 15% minimum rate, beginning in fiscal year 2024.
The Company is in the process of assessing its exposure to the Pillar Two legislation and testing its situation under
the OECD transitional safe harbor rules and expects no major impact from the top-up tax due to the application
of one or more of the transitional safe harbor rules.
Due to the complexities in applying the legislation and calculating GloBE income, the quantitative impact of the
legislation is not yet reasonably estimable.
At the EU level, the European Commission adopted in 2016 its Anti-Tax Avoidance Directive (“ATAD”), later
updated, modified and expanded by ATAD 2, which seeks to prevent tax avoidance by companies and to ensure
that companies pay appropriate taxes in the markets where profits are effectively made and business is effectively
performed. In addition, the European Commission drafted a directive aiming to avoid the use of shell entities
(ATAD 3), which, if approved and adopted by all EU members, is expected to become effective during 2024.
Changes to tax laws and regulations in the countries where we operate require us to continually assess our
organizational structure and could lead to increased risk of international tax disputes.
Our interpretation and application of the tax laws could differ from that of the relevant governmental taxing
authority, which could result in the payment of additional taxes, penalties or interest, negatively affecting our
profitability and financial condition. Significant uncertainties remain in relation to the potential adoption of the
new regulations that might result from evolving initiatives like those launched by the OECD and the EU in relation
to international taxation that could impact negatively our financial condition, results of operations and cash flows.
If we do not comply with laws and regulations designed to combat corruption in countries in which we sell our
products, we could become subject to governmental investigations, fines, penalties or other sanctions and to
private lawsuits and our sales and profitability could suffer
We operate and conduct business globally, including in certain countries known to experience high levels of
corruption. Although we are committed to conducting business in a legal and ethical manner in compliance with
local and international statutory requirements and standards applicable to our business, there is a risk that our
employees, representatives, associates, affiliates, or other persons may take actions that violate applicable laws
and regulations that generally prohibit offering or making of improper payments to any individual, including to
government officials, for the purpose of obtaining a benefit or undue advantage or keeping business, as stated by
the U.S. Foreign Corrupt Practices Act (“FCPA”) and other anti-corruption laws adopted by the main countries in
which we operate, which impose strict criminal liability on companies for corrupt practices undertaken by their
employees or representatives. In addition, we cannot give any assurance that we will detect all illegal activity that
may have been conducted in the past at any acquired business.
Investigations by government authorities may occupy considerable management time and attention, weaken
company compliance culture and result in significant expenditures, fines, penalties or other sanctions, as well as
private lawsuits. For information on matters related to the Company Business Conduct Compliance Program,
please refer to our website on the matter https://www.tenaris.com/en/sustainability/governance-and-ethics/.
For example, upon learning that Brazilian, Italian and Swiss authorities were investigating whether certain
payments were made prior to 2014 from accounts of entities presumably associated with affiliates of the
Company to accounts allegedly linked to individuals related to Petróleo Brasileiro S.A. (“Petrobras”) and whether
any such payments were intended to benefit Confab Industrial S.A. (“Confab”), the Audit Committee of the
Company's board of directors engaged external counsel in connection with the Company’s review of these
matters. In addition, the Company voluntarily notified the SEC and the U.S. Department of Justice (“DOJ”) in
October 2016. The Company conducted, with the assistance of external counsel, an internal investigation and
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found no evidence corroborating any involvement by the Company or its directors, officers or employees in
respect of improper payments. An internal investigation commissioned by Petrobras also found no evidence that
Confab obtained any unfair commercial benefit or advantage from Petrobras in return for payments, including
improperly obtained contracts. On June 2, 2022, the Company resolved the investigation by the SEC and the DOJ
informed that it had closed its parallel inquiry without taking action. Under the settlement with the SEC, the
Company neither admitted nor denied the SEC’s findings and on June 24, 2022, paid $53.1 million in
disgorgement and prejudgment interest and $25 million as a civil penalty to conclude the matter.
For information on matters related to the Petrobras-related proceedings and claims, please see note 27
“Contingencies, commitments and restrictions of profits” to our audited consolidated financial statements
included in this annual report.
The cost of complying with environmental regulations and potential environmental and product liabilities may
increase our operating costs and negatively impact our business, financial condition, results of operations and
prospects
We are subject to a wide range of local, state, provincial and national laws, local and international regulations,
permit requirements and decrees relating to the protection of human health and the environment, including laws
and regulations relating to hazardous materials and radioactive materials and environmental protection governing
air emissions, water discharges and waste management. Laws and regulations protecting the environment have
become increasingly complex and more stringent and expensive to implement in recent years. Additionally,
international environmental requirements vary. While standards in the European Union, Canada, and Japan are
generally comparable to (or more stringent than) U.S. standards, other nations, particularly developing nations,
including China, have substantially fewer or less rigorous requirements that may give competitors in such nations
a competitive advantage. It is possible that any international agreement to regulate emissions may provide
exemptions and lesser standards for developing nations. In such case, we may be at a competitive disadvantage
relative to competitors having more or all of their production in such developing nations.
Environmental laws and regulations may, in some cases, impose strict liability rendering a person liable for
damages to natural resources or threats to public health and safety without regard to negligence or fault. Some
environmental laws provide for joint and several strict liability for remediation of spills and releases of hazardous
substances. These laws and regulations may expose us to liability for the conduct of or conditions caused by
others or for acts that were in compliance with all applicable laws at the time they were performed.
Compliance with applicable requirements and the adoption of new requirements could have a material adverse
effect on our consolidated financial condition, results of operations or cash flows. The costs and ultimate impact
of complying with environmental laws and regulations are not always clearly known or determinable since
regulations under some of these laws have not yet been promulgated or are undergoing revision. The
expenditures necessary to remain in compliance with these laws and regulations, including site or other
remediation costs, or costs incurred as a result of potential violations of environmental laws could have a material
adverse effect on our financial condition and profitability. While we incur and will continue to incur expenditures
to comply with applicable laws and regulations, there always remains a risk that environmental incidents or
accidents may occur that may negatively affect our reputation or our operations.
The European CBAM aims at promoting emissions reductions worldwide by subjecting the import of certain
products, including steel, from countries outside of the European Union to a carbon levy linked to the carbon
price payable for goods produced in EU countries. CBAM entered into application in its transitional phase, on
October 1, 2023, with the first reporting period for importers ending January 31, 2024. Starting on January 1,
2026, CBAM will enter into full force and importers will need to obtain an authorization to import goods covered
by CBAM, make annual statements on the quantity of goods imported into the EU and their embedded GHG
emissions and purchase CBAM certificates to cover their declared emissions.
Our oil and gas casing, tubing and line pipe products are sold primarily for use in oil and gas drilling, gathering,
transportation, processing and power generation facilities, which are subject to inherent risks, including well
failures, line pipe leaks, blowouts, bursts and fires, that could result in death, personal injury, property damage,
environmental pollution or loss of production. Any of these hazards and risks can result in environmental
liabilities, personal injury claims and property damage from the release of hydrocarbons.
Defects in specialty tubing products could result in death, personal injury, property damage, environmental
pollution, damage to equipment and facilities or loss of production.
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Annual Report 2023
We normally warrant the oilfield products and specialty tubing products we sell or distribute in accordance with
customer specifications, but as we pursue our business strategy of providing customers with additional services,
such as Rig Direct®, we may be required to warrant that the goods we sell and services we provide are fit for
their intended purpose. Actual or claimed defects in our products may give rise to claims against us for losses
suffered by our customers and expose us to claims for damages. The insurance we maintain will not be available
in cases of gross negligence or willful misconduct, in other cases may not be adequate or available to protect us in
the event of a claim, its coverage may be limited, canceled, or otherwise terminated, or the amount of our
insurance may be less than the related impact on enterprise value after a loss. Similarly, our sales of tubes and
components for the automotive industry subject us to potential product liability risks that could extend to being
held liable for the costs of the recall of automobiles sold by car manufacturers and their distributors.
Limitations on our ability to protect our intellectual property rights, including our trade secrets, could cause a loss
in revenue and any competitive advantage we hold
Some of our products or services, and the processes we use to produce or provide them, have been granted
patent protection, have patent applications pending, or are trade secrets. Our business may be adversely affected
if our patents are unenforceable, the claims allowed under our patents are not sufficient to protect our
technology, our patent applications are denied, or our trade secrets are not adequately protected. Our
competitors may be able to independently develop technology that is similar to ours without infringing on our
patents or gaining access to our trade secrets, which could adversely affect our financial condition, results of
operations and cash flows.
Cyberattacks could have a material adverse impact on our business and results of operations
We rely heavily on information systems to conduct our operations, and digital technologies have an increasingly
significant role across our business. Although we devote significant resources to protect our systems and data and
we continually monitor and evaluate the actual or potential impact of external developments and available
information on threats and security incidents, we have experienced and will continue to experience varying
degrees of cyber incidents in the normal conduct of our business, which may occasionally include sophisticated
cybersecurity threats such as unauthorized access to data and systems, loss or destruction of data, computer
viruses or other malicious code, phishing, ransomware, spoofing, cyberattacks and/or cybersecurity risks arising
from service providers. These threats often arise from numerous sources, not all of which are within our control,
such as fraud or malice from third parties, including fraud involving business email compromises, failures of
computer servers or other accidental technological failures, electrical or telecommunication outages or other
damage to our property or assets.
Cybersecurity threats represent one of the most significant risks for most businesses. Cyberattack attempts
continued to increase throughout 2023. In particular, Microsoft has reported that the manufacturing sector was
the industry most subject to ransomware attacks in 2023. Experts agree that cyberattacks are increasing in
sophistication and frequency and call for a global response to cybersecurity threats, and regulators are placing
increased focus on cybersecurity and its effects.
Cyber ecosystem risk is becoming more problematic. According to the World Economic Forum’s 2024 Global
Cybersecurity Outlook, the gap between organizations that are cyber resilient and those that are fighting to
survive is widening at an alarming rate and this phenomenon is particularly alarming in light of the interconnected
nature of the cyber ecosystem. According to data set forth in that report, 41% of the organizations that suffered
a material incident in the past twelve months attributed the incidents to a third party, and 54% of the
organizations have insufficient visibility into the vulnerabilities of their supply chain.
In addition, emerging technologies, like generative artificial intelligence (“AI”), which are becoming available
more widely and faster, are expected to exacerbate cyber resilience challenges. Approximately half of executives
surveyed at the World Economic Forum’s annual meeting on cybersecurity stated that advances in adversarial
capabilities (phishing, malware, deepfakes) present the most concerning impact of generative AI on cyber and
fewer than one in ten respondents believe that in the next two years generative AI will give the advantage to
defenders over attackers.
In 2023, we continued improving cybersecurity controls, processes and procedures to monitor, detect, evaluate
and respond to hacking, malware infection, cybersecurity compromise and other risks. In addition, we continued
with cybersecurity awareness and ethical phishing campaigns aimed at protecting us against cyberthreats, and
tailored cybersecurity training programs addressed to our executives and employees.
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Annual Report 2023
Given the rapidly evolving nature of cyberthreats, there can be no assurance that the systems we have designed
to prevent or limit the effects of cyber incidents or attacks will be adequate, and such incidents or attacks could
have a material adverse impact on our systems. While we attempt to mitigate these risks, we remain vulnerable to
additional known or unknown threats, including theft, misplacement or loss of data, programming errors,
employee errors and/or dishonest behavior that could potentially lead to the compromising of sensitive
information, improper use of our systems or networks, as well as unauthorized access, use, disclosure,
modification or destruction of such information, systems and/or networks. If our systems for protecting against
cybersecurity risks are circumvented or breached, this could also result in disruptions to our business operations
(including but not limited to, defective products, production downtimes or loss of productivity), access to our
financial reporting systems, the loss of access to critical data or systems, misuse or corruption of critical data and
proprietary information (including our intellectual property and customer data), as well as damage to our
reputation with our customers and the market, failure to meet customer requirements, customer dissatisfaction
and/or regulatory fines and penalties (including for inadequate protection of personal data and/or failure to notify
the competent authorities for such breach), damages and harm to the environment and people, or other financial
costs and losses. In addition, given that cybersecurity threats continue to evolve, we will be required to devote
additional resources in the future to enhance our protective measures or to investigate and/or remediate any
cybersecurity vulnerabilities. Additionally, although we periodically consider cyber insurance coverage options, we
do not currently maintain cybersecurity insurance, and the insurance we carry for property damage and general
liability may not be adequate or available to protect us from damages derived from cyberthreats or coverage may
be limited. Moreover, any investigation of a cyberattack would take time before completion, during which we
would not necessarily know the extent of the actual or potential harm or how best to remediate it, and certain
errors or actions could be repeated or compounded before duly discovered and remediated (all or any of which
could further increase the costs and consequences arising out of such cyberattack). In addition, failure to
adequately and timely monitor and evaluate our hardware and software systems and applications to prevent or
manage technology obsolescence risks may result in increased costs, increased operational risk of service failure,
loss of technology competitiveness and reputation.
For more information on cybersecurity, please refer to “Cybersecurity”.
Risks Relating to the Structure of the Company
The Company’s dividend payments depend on the results of operations and financial condition of its subsidiaries
and could be restricted by legal, contractual or other limitations or tax changes
The Company is a holding company and conducts all its operations through subsidiaries. Dividends or other
intercompany transfers of funds from those subsidiaries are the Company’s primary source of funds to pay its
expenses, debt service and dividends and to repurchase shares or ADSs.
The ability of the Company’s subsidiaries to pay dividends and make other payments to us will depend on their
results of operations and financial condition. If earnings and cash flows of the Company’s operating subsidiaries
are substantially reduced, the Company may not be in a position to meet its operational needs or to pay
dividends. In addition, such dividends and other payments could be restricted by applicable corporate and other
laws and regulations, including those imposing foreign exchange controls or restrictions on the repatriation of
capital or the making of dividend payments, and agreements and commitments of such subsidiaries. For
information concerning potential restrictions on our ability to collect dividends from certain subsidiaries, see “Key
Information – Risk Factors – Risks Relating to Our Business and Industry – Adverse economic or political conditions
in the countries where we operate or sell our products and services may decrease our sales or disrupt our
manufacturing operations, thereby adversely affecting our revenues, profitability and financial condition”
and “Financial Information – Consolidated Statements and Other Financial Information – Dividend Policy”.
The Company’s ability to pay dividends to shareholders is subject to legal and other requirements and restrictions
in effect at the holding company level. For example, the Company may only pay dividends out of net profits,
retained earnings and distributable reserves and premiums, each as defined and calculated in accordance with
Luxembourg law and regulations. In addition, the Company’s dividend distributions (which are currently imputed
to a special tax reserve and are therefore not subject to Luxembourg withholding tax) may be subject to
Luxembourg withholding tax if current Luxembourg tax law were to change.
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Annual Report 2023
The Company’s controlling shareholder may be able to take actions that do not reflect the will or best interests of
other shareholders
As of December 31, 2023, San Faustin beneficially owned 60.45% of the Company’s issued share capital. San
Faustin’s share percentage ownership will increase if the cancellation of the shares repurchased by the Company
under its share buyback program is approved at the upcoming extraordinary general meeting of shareholders,
scheduled to be held on April 30, 2024. Rocca & Partners Stichting Administratiekantoor Aandelen San Faustin
(“RP STAK”) holds voting rights in San Faustin sufficient to control San Faustin. As a result, RP STAK is indirectly
able to elect a substantial majority of the members of the Company’s board of directors and has the power to
determine the outcome of most actions requiring shareholder approval, including, subject to the requirements of
Luxembourg law, the payment of dividends. The decisions of the controlling shareholder may not reflect the will
or best interest of other shareholders. In addition, the Company’s articles of association permit the Company’s
board of directors to waive, limit or suppress preemptive rights in certain cases. Accordingly, the Company’s
controlling shareholder may cause its board of directors to approve in certain cases an issuance of shares for
consideration without preemptive rights, thereby diluting the minority interest in the Company. See “Key
Information – Risk Factors – Risks Relating to shares and ADSs – Holders of shares and ADSs in the United States
may not be able to exercise preemptive rights in certain cases”.
Risks Relating to shares and ADSs
Holders of shares or ADSs may not have access to as much information about the Company as they would in the
case of a U.S. domestic issuer
There may be less publicly available information about the Company than is regularly published by or about U.S.
domestic issuers. Also, corporate and securities regulations governing Luxembourg companies may not be as
extensive as those in effect in other jurisdictions and U.S. securities regulations applicable to foreign private
issuers, such as the Company, differ in certain respects from those applicable to U.S. domestic issuers.
Furthermore, IFRS, the accounting standards in accordance with which the Company prepares its consolidated
financial statements, differ in certain material aspects from U.S. GAAP. For a summary of the significant ways in
which the Company’s corporate governance practices differ from the corporate governance standards required
for domestic companies by the New York Stock Exchange (“NYSE”), see “Corporate Governance Statement –
Summary of differences with NYSE standards”.
Holders of ADSs may not be able to exercise, or may encounter difficulties in the exercise of, certain rights
afforded to shareholders
Certain shareholders’ rights under Luxembourg law, including the rights to participate and vote at general
meetings of shareholders, to include items on the agenda for the general meetings of shareholders, to receive
dividends and distributions, to bring actions, to examine our books and records and to exercise appraisal rights
may not be available to holders of ADSs, or may be subject to restrictions and special procedures for their
exercise, as holders of ADSs only have those rights that are expressly granted to them in the deposit agreement.
Deutsche Bank Trust Company Americas, as depositary under the ADS deposit agreement, or the Depositary,
through its custodian agent, is the registered shareholder of the deposited shares underlying the ADSs, and
therefore only the Depositary can exercise the shareholders’ rights in connection with the deposited shares. For
example, if the Company makes a distribution in the form of securities, the Depositary is allowed, at its discretion,
to sell the right to acquire those securities on your behalf and to instead distribute the net proceeds to you. Also,
under certain circumstances, such as the Company’s failure to provide the Depositary with voting materials on a
timely basis, you may not be able to vote at general meetings of shareholders by giving instructions to the
Depositary. If the Depositary does not receive voting instructions from the holder of ADSs by the prescribed
deadline, or the instructions are not in proper form, then the Depositary shall deem such holder of ADSs to have
instructed the Depositary to vote the underlying shares represented by ADSs in favor of any proposals or
recommendations of the Company (including any recommendation by the Company to vote such underlying
shares on any given issue in accordance with the majority shareholder vote on that issue), for which purposes the
Depositary shall issue a proxy to a person appointed by the Company to vote such underlying shares represented
by ADSs in favor of any proposals or recommendations of the Company. Under the ADS deposit agreement, no
instruction shall be deemed given and no proxy shall be given with respect to any matter as to which the
Company informs the Depositary that (i) it does not wish such proxy given, (ii) it has knowledge that substantial
opposition exists with respect to the action to be taken at the meeting, or (iii) the matter materially and adversely
affects the rights of the holders of ADSs.
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Annual Report 2023
Holders of shares and ADSs in the United States may not be able to exercise preemptive rights in certain cases
Pursuant to Luxembourg corporate law, existing shareholders of the Company are generally entitled to
preferential subscription rights (preemptive rights) in the event of capital increases and issues of shares against
cash contributions. Under the Company’s articles of association, the board of directors has been authorized to
waive, limit or suppress such preemptive subscription rights. Notwithstanding the waiver of any preemptive
subscription rights, any issuance of shares for cash within the limits of the authorized share capital shall be subject
to the preemptive subscription rights of existing shareholders, except (i) any issuance of shares (including without
limitation, the direct issuance of shares or upon the exercise of options, rights convertible into shares, or similar
instruments convertible or exchangeable into shares) against a contribution other than in cash; and (ii) any
issuance of shares (including by way of free shares or at discount), up to an amount of 1.5% of the issued share
capital of the Company, to directors, officers, agents, employees of the Company, its direct or indirect subsidiaries
or its affiliates (or, collectively, the beneficiaries), including without limitation, the direct issuance of shares or
upon the exercise of options, rights convertible into shares or similar instruments convertible or exchangeable into
shares, issued for the purpose of compensation or incentive of the beneficiaries or in relation thereto (which the
board of directors shall be authorized to issue upon such terms and conditions as it deems fit). For further details,
see “Corporate Governance Statement – Corporate Governance”.
Holders of ADSs in the United States may, in any event, not be able to exercise any preemptive rights, if granted,
for shares underlying their ADSs unless additional shares and ADSs are registered under the U.S. Securities Act of
1933, as amended, (“Securities Act”), with respect to those rights, or an exemption from the registration
requirements of the Securities Act is available. The Company intends to evaluate, at the time of any rights
offering, the costs and potential liabilities associated with the exercise by holders of shares and ADSs of the
preemptive rights for shares, and any other factors it considers appropriate at the time, and then to make a
decision as to whether to register additional shares. The Company may decide not to register any additional
shares, requiring a sale by the Depositary of the holders’ rights and a distribution of the proceeds thereof. Should
the Depositary not be permitted or otherwise be unable to sell preemptive rights, the rights may be allowed to
lapse with no consideration to be received by the holders of the ADSs.
It may be difficult to obtain or enforce judgments against the Company outside Luxembourg
The Company is a société anonyme organized under the laws of the Grand Duchy of Luxembourg, and most of its
assets are located in other jurisdictions. Furthermore, most of the Company’s directors and officers reside in other
jurisdictions. As a result, investors may not be able to effect service of process upon the Company or its directors
or officers. Investors may also not be able to enforce against the Company or its directors or officers in the
investors’ domestic courts, judgments predicated upon the civil liability provisions of the domestic laws of the
investors’ home countries. Likewise, it may be difficult for investors not domiciled in Luxembourg to bring an
original action in a Luxembourg court predicated upon the civil liability provisions of other securities laws,
including U.S. federal securities laws, against the Company, its directors or its officers. There is also uncertainty
with regard to the enforceability of original actions of civil liabilities predicated upon the civil liability provisions of
securities laws, including U.S. federal securities laws, outside the jurisdiction where such judgments have been
rendered; and enforceability will be subject to compliance with procedural requirements under applicable local
law, including the condition that the judgment does not violate the public policy of the applicable jurisdiction.
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Annual Report 2023
Information on the Company
Overview
Tenaris is a leading global manufacturer and supplier of steel pipe products and related services for the world’s
energy industry and other industrial applications. Our customers include most of the world’s leading oil & gas
companies, and we operate an integrated network of steel pipe manufacturing, research, finishing and service
facilities with industrial operations in the Americas, Europe, the Middle East, Asia and Africa.
Although our operations are focused on serving the oil & gas industry, we also supply pipes and tubular
components for non-energy applications. We develop and supply products and services for low-carbon energy
applications such as geothermal wells, waste-to-energy (bioenergy) power plants, hydrogen storage and
transportation, and carbon capture and storage.
Through an integrated global network of R&D, manufacturing, and service facilities, and a team of more than
29,000 people worldwide, we work with our customers to meet their needs in a timely manner, observing the
highest levels of product performance and reliability.
History and Development of the Company
The Company
The Company is a société anonyme organized under the laws of the Grand Duchy of Luxembourg established on
December 17, 2001. The Company’s registered office is located at 26 Boulevard Royal, 4th Floor, L-2449,
Luxembourg. Its agent for U.S. federal securities law purposes is Tenaris Global Services (U.S.A.) Corporation
(“TEUS”), located at 2200 West Loop South, Suite 800, Houston, TX 77027.
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Annual Report 2023
Tenaris
Tenaris began with the formation of Siderca, the sole Argentine producer of seamless steel pipe products, by San
Faustin’s predecessor in Argentina in 1948. We grew organically in Argentina and then, in the early 1990s, began
to evolve beyond this initial base into a global business through a series of strategic investments. As of the date of
this annual report, our investments include controlling interests in several manufacturing companies:
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Siat S.A., an Argentine welded steel pipe manufacturer;
Tamsa, the sole Mexican producer of seamless steel pipe products;
Dalmine S.p.A. (“Dalmine”), a leading Italian producer of seamless steel pipe products;
Confab, the leading Brazilian producer of welded steel pipe products;
Algoma Tubes Inc. (“AlgomaTubes”), a Canadian producer of seamless and welded steel pipe products;
S.C. Silcotub S.A. (“Silcotub”), a leading Romanian producer of seamless steel pipe products;
Maverick Tube Corporation (“Maverick”), a U.S. producer of seamless and welded steel pipe products;
Tenaris TuboCaribe Ltda. (“TuboCaribe”), a welded pipe mill producing OCTG products including finishing
of welded and seamless pipes, line pipe products, and couplings in Colombia;
Hydril, a North American manufacturer of premium connection products for oil and gas drilling production;
PT Seamless Pipe Indonesia Jaya (“SPIJ”), an Indonesian OCTG processing business with heat treatment and
premium connection threading facilities;
Tenaris Qingdao Steel Pipes Ltd. (“Tenaris Qingdao”), a Chinese producer of premium joints, couplings and
tubular components for airbags;
Pipe Coaters Nigeria Ltd. (“Pipe Coaters”), a leading company in the Nigerian coating industry;
Tenaris Bay City Inc. (“Tenaris Bay City”), a state-of-the-art seamless pipe mill in Bay City, Texas;
Saudi Steel Pipe Company (“SSPC”), a Saudi producer of welded steel pipe products;
IPSCO, a North American manufacturer of seamless and welded steel pipes;
Tenaris Baogang Baotou Steel Pipes, Ltd. (“TBSP”), a Chinese company that owns a premium connection
threading facility in Baotou, China, in which we have a 60% interest;
Global Pipe Company (“GPC”), a Saudi company which manufactures longitudinal submerged arc welded
(“LSAW”) pipes;
Bredero Shaw International BV (“BSIBV”) and its subsidiaries, which hold the pipe coating business recently
acquired from Mattr; and
sucker rods businesses in various countries.
In addition, we own a 50% participation in Exiros B.V. (“Exiros”), a Dutch company that holds a network of
specialized procurement companies, with our affiliate Ternium S.A. (“Ternium”) holding the remaining 50%.
We also own strategic interests in:
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Ternium, one of the leading flat steel producers of the Americas with operating facilities in Mexico, Brazil,
Argentina, Colombia, the southern United States and Central America;
Usiminas, a Brazilian producer of high quality flat steel products used in the energy, automotive and other
industries; and
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Annual Report 2023
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Techgen, an electric power plant in Mexico.
In addition, we have established a global network of pipe finishing, distribution and service facilities with a direct
presence in most major oil and gas markets and a global network of R&D centers.
For information on Tenaris’s principal capital expenditures and divestitures, see “Information on the Company –
Business Overview – Capital Expenditure Program”.
Business Overview
Our business strategy is to consolidate our position as a leading global supplier of integrated product and service
solutions to the energy and other industries and to adapt to the energy transition through reducing the carbon
emissions in our operations and on developing and supplying products and services for low-carbon energy
applications by:
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pursuing strategic investment opportunities in order to further strengthen our presence in local and global
markets;
expanding our comprehensive range of products and developing new products designed to meet the needs
of customers operating in challenging environments, including low carbon energy applications, such as
hydrogen and carbon capture and storage;
enhancing our offering of technical, digital and supply chain integration services designed to enable
customers to optimize well planning and integrity, simplify operations and reduce overall operating costs;
and
securing an adequate supply of production inputs and reducing the manufacturing costs and carbon
intensity of our core products.
Pursuing strategic investment opportunities and alliances
We have a solid record of growth through strategic investments and acquisitions. We pursue selective strategic
investments and acquisitions as a means to expand our operations and presence in select markets, enhance our
global competitive position and capitalize on potential operational synergies. During 2023, for example:
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We completed the construction of a wind farm in Argentina at a cost of approximately $200 million, which
is expected to reduce Tenaris’s CO2 emissions in that country by 152,000 tons per year and supply close to
50% of the energy requirements at the integrated seamless pipe mill in Campana, Argentina.
The Company’s board of directors approved, an investment plan to build a second wind farm in Argentina
at a cost of approximately $214 million, which would supply a further 30% of the current energy
requirements of the facilities in Campana and reduce the CO2 emissions a further 102,500 tons per year.
This investment is expected to be completed during 2025.
Our subsidiary SSPC completed the acquisition of an additional 22.3% interest in GPC from Erndtebruecker
Eisenwerk, a German company that owned a 35% interest in GPC, for a purchase price of $6.3 million paid
in cash. SSPC already owned a 35% interest in GPC, and following the completion of this transaction,
SSPC holds a 57.3% aggregate interest in GPC and we began to consolidate its balances and results of
operations since May 2023.
Confab completed the acquisition of 11.0 million ordinary shares of Usiminas for approximately BRL110
million (approximately $23 million) in cash, increasing Tenaris’s participation in Usiminas’ share capital to
3.96%.
An Italian subsidiary of the Company acquired all of the assets and related rights, duties, liabilities and
contracts of Isoplus Mediterranean S.r.l.’s (“Isoplus”) anticorrosion coating division, renamed “Tenaris
Coating”, for EUR9.0 million (approximately $9.8 million).
A U.S. subsidiary of the Company acquired all of the assets and related rights, duties, liabilities and
contracts of Republic Tube’s OCTG pipe processing facility in Houston, Texas for $90.5 million.
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Annual Report 2023
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One of the Company’s subsidiaries acquired from Mattr, 100% of the shares of BSIBV, which holds Mattr’s
pipe coating business (“Shawcor”), for $182.6 million, subject to a customary price adjustment.
Our track record on the acquisition of companies is described above in “History and Development of the
Company – Tenaris”.
Expanding our range of products including the development of new products for the energy transition
We have developed an extensive range of high-value products suitable for most of our customers’ operations
using our network of specialized R&D facilities and by investing in our manufacturing facilities. As our customers
expand their operations, we seek to supply high-value products that reduce costs and enable them to operate
safely in challenging environments, including those for low-carbon applications associated with the energy
transition.
As suppliers of tubular products and services to the energy industry, the energy transition currently underway
provides an important opportunity to develop new products and services for potentially fast-growing segments
like hydrogen transportation and storage, carbon capture and storage (“CCS”) and geothermal installations. We
have developed a range of technologies that are particularly suited for use in hydrogen storage and
transportation, where we are seeing growth in demand for large, high-pressure vessels used in the build out of
hydrogen refueling stations for heavy-duty vehicles and buses in Europe and California. We are also seeing
increasing interest from customers for developing CCS and geothermal projects.
Enhancing our offering of technical, digital and supply chain integration services - Rig Direct® - and extending
their global deployment
We continue to enhance our offering of Rig Direct® services and extend their deployment worldwide. For many
years, we have provided these services, managing customer inventories and directly supplying pipes to their rigs
on a just-in-time basis, complemented by technical advice and assistance on the selection of materials and their
use in the field, in markets like Mexico and Argentina. In response to changes in market conditions and the
increased focus of customers on reducing costs and improving the efficiency of their operations, the extent and
deployment of our Rig Direct® services has been extended throughout North America and in other markets
around the world (e.g., Colombia, North Sea, Romania and the United Arab Emirates) and now include digital and
more extensive supply chain integration services. Through the provision of Rig Direct® services, we seek to
integrate our operations with those of our customers using digital technologies to shorten the supply chain and
simplify operational and administrative processes, as well as technical services for well planning and well integrity,
to reduce costs, improve safety and minimize environmental impact. They are also intended to differentiate us
from our competitors and further strengthen our relationships with customers worldwide under long-term
agreements.
In addition, the acquisition of Mattr’s pipe coating business unit, with nine plants located in Canada, Mexico,
Norway, Indonesia, the United Arab Emirates and the United States, and several mobile concrete plants, and of
Isoplus’s anticorrosion coating division is expected to complement Tenaris’s products and solutions providing
greater capabilities and specialization in end-to-end concrete weight, anti-corrosion, and flow assurance coating
solutions for offshore and onshore pipelines.
Securing inputs for our manufacturing operations
We seek to secure our existing sources of raw material and energy inputs, and to gain access to new sources of
low-cost inputs which can help us maintain or reduce the cost of manufacturing our core products and reduce the
carbon emissions intensity of our operations over the long term. We aim to achieve a vertically integrated value
chain for our production. To this end, we purchase most of our supplies through Exiros, a specialized
procurement company the ownership of which we share with Ternium. Exiros offers us integral procurement
solutions, supplier sourcing activities; category organized purchasing; suppliers’ performance administration; and
inventory management.
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Annual Report 2023
Our Competitive Strengths
We believe our main competitive strengths include:
•
•
•
•
•
•
•
our global production, commercial, distribution and service capabilities, offering a full product range with
flexible supply options backed up by local service capabilities in important oil and gas producing and
industrial regions around the world;
our ability to develop, design and manufacture technologically advanced products and provide value-added
services;
our solid and diversified customer base and historic relationships with major international oil and gas
companies around the world, and our strong and stable market shares in most of the countries in which
we have manufacturing operations;
our proximity to our customers;
our human resources around the world with their diverse knowledge and skills;
our low-cost operations, primarily at state-of-the-art, strategically located production facilities with
favorable access to raw materials, energy and labor, and a solid track-record of operating experience; and
our strong financial condition.
Business Segments
Tenaris has one major business segment, “Tubes”, which is also the reportable operating segment. All other
business activities and operating segments that are not required to be separately reported, are disclosed in the
“Others” segment.
The Tubes segment includes the production and sale of both seamless and welded steel tubular products and
related services mainly for the energy industry, particularly casing and tubing used in oil and gas drilling
operations, and line pipe used in the transportation and processing of oil and gas, but also other industrial
applications. Our production processes include the production of steel and its transformation into tubular
products. Business activities included in this segment are mainly dependent on the worldwide oil and gas industry,
as this industry is a major consumer of steel pipe products. Demand for steel pipe products and services from the
energy industry has historically been volatile and depends primarily upon the number of oil and natural gas wells
being drilled, completed and reworked, and the depth and drilling conditions of such wells. Major oil and gas
companies are beginning to adapt their strategies and increase their investments in renewable energies to address
the energy transition while maintaining their capability to meet market demand for oil and gas and reducing the
emissions from their operations. As the energy transition advances, demand for our products and services from
low-carbon energy applications, such as geothermal, hydrogen and carbon capture and storage, is expected to
increase while demand for oil and gas applications may decrease.
Sales are generally made to end users, with exports being done through a centrally managed global distribution
network and domestic sales made through local subsidiaries.
The “Others” segment includes all other business activities and operating segments related to the production and
sale of sucker rods, tubes used for plumbing and construction applications, coiled tubing used in oil and gas
extraction activities, oil and gas services including fracking and coiled tubing services in Argentina, the recently
acquired pipe coating business and others, such as the sale of energy and raw materials that exceed our internal
requirements.
For more information on our business segments, see “II C. Accounting Policies – Segment information” to our
audited consolidated financial statements included in this annual report.
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Annual Report 2023
Our Products
Our principal finished products are seamless and welded steel casing and tubing, line pipe and various other
mechanical and structural steel pipes for different uses. Casing and tubing are also known as oil country tubular
goods (“OCTG”). We manufacture our steel pipe products in a wide range of specifications, which vary in
diameter, length, thickness, finishing, steel grades, coating, threading and coupling. For more complex
applications, including high pressure and high temperature applications, seamless steel pipes are usually specified
and, for some standard applications, welded steel pipes can also be used. In addition to oil and gas applications,
many of our products can also be used in low-carbon energy applications, such as geothermal, hydrogen and
carbon capture and storage.
Casing. Steel casing is used to sustain the walls of oil and gas wells during and after drilling.
Tubing. Steel tubing is used to conduct crude oil and natural gas to the surface after drilling has been completed.
Line pipe. Steel line pipe is used to transport crude oil and natural gas from wells to refineries, storage tanks and
loading and distribution centers.
Mechanical and structural pipes. Mechanical and structural pipes are used by general industry for various
applications, including the transportation of other forms of gas and liquids under high pressure.
Cold-drawn pipe. The cold-drawing process permits the production of pipes with the diameter and wall thickness
required for use in boilers, superheaters, condensers, heat exchangers, automobile production and several other
industrial applications.
Premium joints and couplings. Premium joints and couplings are specially designed connections used to join
lengths of steel casing and tubing for use in high temperature or high pressure environments. A significant
portion of our steel casing and tubing products are supplied with premium joints and couplings. We own an
extensive range of premium connections, and following the integration of the premium connections business of
Hydril, we have marketed our premium connection products under the “TenarisHydril” brand name. In addition,
we hold licensing rights to manufacture and sell the “Atlas Bradford” range of premium connections outside the
United States and we own the “Ultra” and “TORQ” ranges of premium connections.
Coiled tubing. Coiled tubing is used for oil and gas drilling and well workovers and for subsea pipelines.
Other products and services. We also manufacture sucker rods used in oil extraction activities, tubes used for
plumbing and construction applications, oilfield / hydraulic fracturing services and coating services, which are
expected to be enhanced following the recent acquisitions, and we engage in other activities, such as the sale of
energy and raw materials that exceed our internal requirements.
Production Process and Facilities
We operate relatively low-cost production facilities, which we believe is the result of:
•
•
•
•
•
•
state-of-the-art, strategically located plants;
favorable access to high quality raw materials, energy and labor at competitive costs;
operating history of almost 70 years, which translates into solid industrial know-how;
constant benchmarking and best-practices sharing among the different facilities;
increasing specialization of each of our facilities in specific product ranges; and
extensive use of digital technologies in our production processes.
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Annual Report 2023
Our seamless pipes production and processing facilities are located in North and South America, Europe and Asia.
Our welded pipes production facilities are located in North and South America and in Saudi Arabia. We also
produce steel bars in the United States, Mexico, Argentina, Italy and Romania using the scrap-based electric arc
furnace process that results in relatively low carbon emissions compared to primary steelmaking processes. In
addition to our pipe threading and finishing facilities at our integrated pipe production facilities, we have
additional pipe and/or pipe accessory threading facilities that manufacture products in accordance with the
specifications of the American Petroleum Institute (“API”), and premium joints in Canada, China, Ecuador,
Indonesia, Kazakhstan, Nigeria, Saudi Arabia, the United Kingdom and the United States, and a new premium
OCTG threading facility in Abu Dhabi, United Arab Emirates. We produce couplings in Argentina, China,
Colombia, Indonesia, Mexico and Romania, and pipe fittings in Mexico. In addition, we have sucker rods
production facilities in Argentina, Brazil, Mexico, Romania, and the United States and a coiled tubing production
facility in the United States. We also have a global network of pipe coating plants in United States, Canada,
Mexico, Norway, Indonesia, United Arab Emirates, Brazil, Argentina, Nigeria, Italy and Colombia.
The following table shows our aggregate installed production capacity of seamless and welded steel pipes and
steel bars at the dates indicated as well as the aggregate actual production volumes for the periods indicated.
Thousands of tons
Steel Bars
Effective Capacity (annual) (1)
Actual Production
Tubes – Seamless
Effective Capacity (annual) (1)
Actual Production
Tubes – Welded
Effective Capacity (annual) (1)
Actual Production
At or for the year ended December 31,
2022
2021
2023
4,485
3,726
4,677
3,188
4,190
953
4,485
3,746
4,937
3,347
3,977
527
4,485
3,141
4,937
2,736
3,778
237
___________________________________________________________________________
(1) Effective annual production capacity is calculated based on standard productivity of production lines, theoretical product mix allocations,
the maximum number of possible working shifts and a continued flow of supplies to the production process. In 2023 the calculation of
annual production capacity was revised and comparative figures were restated to adapt them to the new methodology.
In 2023, the capacity of seamless tubes decreased due to the closure of NKKTubes and the capacity of welded
tubes increased due to the consolidation of GPC.
Production Facilities – Tubes
North America
In Mexico, we have a fully integrated seamless pipe manufacturing facility, a threading plant and a pipe fittings
facility; in the United States, one steel shop, two seamless pipe rolling mills, four welded pipe manufacturing
facilities and five threading plants; and in Canada an integrated facility with capacity for seamless and welded
pipes plus a threading plant.
Mexico
In Mexico, our fully integrated seamless pipe manufacturing facility is located near the major exploration and
drilling operations of Pemex, about 13 kilometers from the port of Veracruz on the Gulf of Mexico. Situated on an
area of 650 hectares, the plant includes two state-of-the-art seamless pipe mills and has an installed annual
production capacity of approximately 1,230,000 tons of seamless steel pipes (with an outside diameter range of 2
to 20 inches) and 1,200,000 tons of steel bars. The plant is served by two highways and a railroad and is close to
the port of Veracruz, which reduces transportation costs and facilitates product shipments to export markets.
The Veracruz facility comprises:
•
a steel shop, including an electric arc furnace, refining equipment, vacuum degassing, five-strand
continuous caster and a cooling bed;
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Annual Report 2023
•
•
•
•
•
•
a multi-stand pipe mill, including a rotary furnace, direct piercing equipment, mandrel mill with retained
mandrel, sizing mill and a cooling bed;
a premium quality finishing (“PQF”) technology mill (2 3⁄8 to 7 inches), including a rotary furnace, direct
piercing equipment, mandrel mill with retained mandrel, sizing mill and a cooling bed;
a pilger pipe mill, including a rotary furnace, direct piercing equipment, a reheating furnace, sizing mill and
a cooling bed;
six finishing lines, including heat treatment lines, upsetting machines and threading and inspection
equipment;
a cold-drawing mill; and
an automotive components production center.
In Veracruz, located near our fully integrated seamless pipe manufacturing facility, we have a threading plant,
which produces premium connections and accessories.
In addition to the Veracruz facilities, we operate a manufacturing facility near Monterrey in the state of Nuevo
León, Mexico, for the production of weldable pipe fittings. This facility has an annual production capacity of
approximately 15,000 tons.
United States
In the United States we have the following production facilities:
Koppel, Pennsylvania: Acquired in 2020, the facility is located on an area of 89 hectares and consists of a steel
shop with an annual production capacity of approximately 430,000 tons of steel bars and a heat treatment line.
This facility supplies steel bars both to our Bay City and Ambridge seamless pipe rolling mills.
Bay City, Texas: Our 1.2 million square feet greenfield seamless mill is located on an area of 552 hectares. The
facility is the result of an investment of $1.8 billion and includes a state-of-the-art rolling mill with a capacity of
approximately 757,000 tons per year (with an outside diameter range of 4 ½ to 9 5/8 inches), as well as a heat
treatment line, a finishing line and a logistics center.
The Bay City facility comprises:
•
•
•
•
a retained mandrel mill PQF;
a fully automated intermediate warehouse;
a heat treatment line; and
a finishing line.
Ambridge, Pennsylvania: A seamless rolling mill located on an area of 19 hectares, with a capacity of
approximately 357,000 tons per year (with an outside diameter range of 2 3⁄8 through 5 1⁄2 inches).
Hickman, Arkansas: This facility, which is our main U.S. welded production facility and covers an area of 78
hectares, processes steel coils to produce electric resistance welded (“ERW”) OCTG and line pipe with an outside
diameter range from 2 3⁄8 to 16 inches and has an annual production capacity of approximately 1,104,000 tons. It
includes:
•
•
•
a plant comprising two welding lines producing 2 3⁄8 through 5 1⁄2 inches API products with two finishing
lines and two heat treatment lines;
a plant comprising of a welding line producing 6 through 16 inches API products and a finishing line; and
a coating facility coating sizes up to 16 inches.
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Annual Report 2023
Blytheville, Arkansas: Located 2.5 miles from our Hickman facility; this facility produces ERW OCTG and performs
finishing operations including heat treatment, inspection, upsetting and threading. The facility has four lines: one
welding line producing 2 3⁄8 to 4 ½ inches outside diameter pipes with an annual production capacity of
approximately 200,000 tons; one heat treatment line, one inspection line and one threading line for pipes
between 2 3⁄8 and 5 ½ inches outside diameter.
Conroe, Texas: Located in an area of approximately 26 hectares north of Houston, Texas and has a capability of
processing pipes with an outside diameter from 4 ½ to 8 5⁄8 inches. The plant has four production lines: one ERW
welding line with a capacity of approximately 222,000 tons; one heat treatment line, one inspection line and one
threading line.
Baytown, Texas: Located in an area of approximately 25 hectares east of Houston, Texas the facility heat-treats
and finishes OCTG. The facility has six lines: one heat treatment, and one inspection line with outside diameter
capability from 4 ½ to 7 5⁄8 inches and four threading lines capable of processing pipes 4 ½ to 13 5⁄8 inches
outside diameter with a capacity of 220,000 tons.
Wilder, Kentucky: Located near the natural gas deposits of the Marcellus Shale, this 113 hectares facility produces
both ERW casing and line pipe from 7 to 16 inches outside diameter. The facility has two lines: one welding line
with annual capacity of 360,000 tons; and one finishing line. Additionally this facility has a coating line. This
facility is currently idle.
In addition, we have facilities for heat treatment, threading and finishing pipes in Houston, Texas and Brookfield,
Ohio.
Canada
In Canada, we have a manufacturing facility located in an area of approximately 45 hectares in Sault Ste. Marie,
near the mouth of Lake Superior in the province of Ontario. The facility includes a seamless pipe hot rolling mill
(retained mandrel mill and stretch reducing mill), a welded pipe ERW mill, a heat treatment line, three finishing
lines (one with threaders for API and semi-premium connections) and a premium threading line.
For seamless, the effective annual production capacity is 371,000 tons with an outside diameter range of 3 1⁄2 to 9
7⁄8 inches. We mainly use steel bars produced by our facilities in Romania, Italy, Mexico, Argentina and the United
States.
For welded, the effective annual production capacity is 200,000 tons. The outside diameter range of the line is
from 4 1⁄2 to 12 3⁄4 inches. The facility includes a slitter, which cuts the master coils into the required dimensions
for each outside diameter. The line commenced operations in the second half of 2022 as part of an investment
plan to reposition our industrial footprint and strengthen the competitiveness and domestic production
capabilities of the Canadian market.
In addition, we have a threading facility in Nisku, Alberta, near the center of Western Canadian drilling area. The
facility has twelve computer numerical control (“CNC”) lathes dedicated to premium connections and accessories,
including related repairs.
South America
In Argentina, we have a fully integrated seamless pipe facility. In addition, we have welded pipe manufacturing
facilities in Argentina, Brazil and Colombia.
Argentina
Our principal manufacturing facility in South America is a fully integrated plant on the banks of the Paraná river,
near the city of Campana, approximately 80 kilometers north from the city of Buenos Aires, Argentina. Situated
on over 300 hectares, the plant includes a state-of-the-art seamless pipe facility and has an effective annual
production capacity of approximately 794,000 tons of seamless steel pipe (with an outside diameter range of 1 1⁄4
to 10 3⁄4 inches) and 1,300,000 tons of steel bars.
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Annual Report 2023
The Campana facility comprises:
•
•
•
•
•
•
a DRI production plant;
a steel shop with two production lines, each including an electric arc furnace, refining equipment, four-
strand continuous caster and a cooling bed;
two continuous mandrel mills, each including a rotary furnace, direct piercing equipment and a cooling bed
and, one of them, also including a stretch reducing mill;
seven finishing lines, including heat treatment lines, upsetting machines, threading and inspection
equipment and make-up facilities;
a cold-drawing mill; and
a port on the Paraná river for the supply of raw materials and the shipment of finished products.
Our local electric energy requirements are satisfied through purchases in the local market and by a 35 megawatts
power generating plant located within the Campana facility and, since October 2023, from our new wind farm,
which required an investment of approximately $200 million and is able to supply close to 50% of the energy
requirements at the integrated seamless pipe mill in Campana, Argentina. The new wind farm is expected to
reduce Tenaris’s CO2 emissions in that country by 152,000 tons per year.
On November 1, 2023, the Company’s board of directors approved an investment plan to build a second wind
farm in Argentina at a cost of approximately $214 million, which would supply a further 30% of the current
energy requirements of the facilities in Campana and reduce the CO2 emissions by a further 102,500 tons per
year. This investment is expected to be completed during 2025.
In addition to our main integrated seamless pipe facility, we also have two welded pipe manufacturing facilities in
Argentina. One is located at Valentín Alsina, south of the city of Buenos Aires. This facility includes ERW,
submerged arc welding (“SAW”) rolling mills with one spiral line and a coating line. The facility processes steel
coils and plates to produce welded steel pipes with an outside diameter range of 4 1⁄2 to 80 inches, which are used
for the conveying of fluids at low, medium and high pressure and for mechanical and structural purposes. The
facility has an annual production capacity of approximately 620,000 tons. The other welded facility, located at
Villa Constitución in the province of Santa Fe, has an annual production capacity of approximately 123,000 tons
of welded pipes with an outside diameter range of 1 to 8 inches.
Brazil
In Brazil, we have the Confab welded pipe manufacturing facility, located in Pindamonhangaba and Moreira
Cesar, 160 kilometers northeast from the city of São Paulo. The two sites have a combined area of around 150
hectares and include an ERW rolling mill, a SAW longitudinal rolling mill as well as pipe finishing and coating
lines. The facility processes steel coils and plates to produce welded steel pipes with an outside diameter range
from 5 1⁄2 to 48 inches for various applications, including OCTG and Line Pipe for oil, petrochemical and gas
applications. In addition to weld-on connectors for conductor casings, the facility also supplies anticorrosive
coating made of extruded polyethylene or polypropylene, external fusion bonded epoxy, thermal insulation,
concrete weight coating and paint for internal pipe coating. The facility has an annual production capacity of
approximately 654,000 tons.
Colombia and Ecuador
In Colombia, we have TuboCaribe, a welded pipe manufacturing facility in Cartagena, on an area of 60 hectares,
with an estimated annual ERW production capacity of approximately 105,000 tons. The facility also includes a
state-of-the-art finishing plant for seamless pipes, with a total estimated annual finishing capacity of
approximately 250,000 tons.
This facility produces OCTG and line pipe products with an outside diameter range of 2 3⁄8 to 9 5⁄8 inches, and
includes two ERW mills, one heat treatment line, one slotting line and three threading lines, including premium
connections capacity. Inspection lines and materials testing laboratories complete the production facility. A 2 to
24 inches diameter multilayer coating facility complements our line pipe production facilities.
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Annual Report 2023
In addition, we have a coupling shop with inspection and finishing lines. The shop has an estimated annual
production capacity of 2.3 million pieces, including API and premium threads.
In Ecuador, we have a threading and finishing facility with an annual capacity of 35,000 tons, and a service center
which is designed to support our Rig Direct® strategy, both situated in Machachi.
Europe
In Europe, we have several seamless pipe manufacturing facilities in Italy and one in Romania, and a premium
connection threading facility in the United Kingdom.
Italy
Our principal manufacturing facility in Europe is an integrated plant located in the town of Dalmine, in the
industrial area of Bergamo, about 40 kilometers from Milan in northern Italy. Situated on an area of 150 hectares,
the plant includes a state-of-the-art seamless pipe mill and has an annual production capacity of approximately
766,000 tons of seamless steel pipes with an outside diameter range of 5.7 to 28 inches, mainly from carbon, low
alloy and high alloy steels for diverse applications. The facility also includes a steel shop with a capacity of 935,000
tons of steel bars for processing at our facilities in Italy and elsewhere.
The Dalmine facility comprises:
•
•
•
•
a steel shop, including an electric arc furnace, three ladle furnaces, two vacuum degassing and two
continuous casters with their own cooling beds;
a retained mandrel mill with two in-line-high-productivity finishing lines including one heat treatment;
a rotary expander with a finishing line including a heat treatment; and
two premium connection threading lines.
We also have a production facility, located in Arcore, about 25 kilometers from Milan in northern Italy. The Arcore
facility, which covers an area of approximately 26 hectares and comprises a Diescher mill with associated finishing
lines. Production is concentrated in heavy-wall mechanical pipes with an outside diameter range of 1.89 to 8.62
inches. The Arcore facility has an annual production capacity of approximately 144,000 tons.
In addition to the main facility mentioned above, we also have:
•
•
•
the Costa Volpino facility, which comprises a cold-drawing mill and an auto components facility producing
cold-drawn carbon, low alloy and high alloy steel pipes with an outside diameter range of 0.47 to 15
inches, mainly for automotive, mechanical and machinery companies in Europe. The Costa Volpino facility
has an annual production capacity of approximately 55,000 tons; and
a facility at Sabbio, which manufactures gas cylinders with an annual production capacity of approximately
14,000 tons or 270,000 pieces, and a large vessels plant inside the Dalmine facility, with a production
capacity of around 2,500 finished pieces per year; and
the newly acquired Isoplus facility located in Villamarzana, comprising land, anticorrosion equipment and
utilities. This facility is located approximately 200 kilometers from our Dalmine plant and is close to the
main Adriatic ports used for our exports. The facility covers an area of approximately 5 hectares and covers
the full range of anticorrosion solutions for the oil and gas industry.
In order to reduce the cost of electrical energy at our operations in Dalmine, we operate a gas-fired, combined
heat and power station with a capacity of 120 megawatts in Dalmine. Our operations in Dalmine consume a
share of the power generated at the power station, which has sufficient capacity to meet almost the entire
electric power requirements of these operations. The additional energy needed to cover consumption peaks and
the excess energy produced are purchased from and sold to the market, while heat is sold for district heating.
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Annual Report 2023
Romania
We have a seamless steel pipe manufacturing facility in northwest Romania, on an area of approximately 37
hectares, located in the city of Zalau, 530 kilometers from Bucharest. The seamless facility includes a hot rolling
mill and has an annual production capacity of approximately 258,000 tons of seamless pipes. The plant produces
carbon and alloy steel tubes with an outside diameter range of 0.84 to 6.26 inches for hot rolled tubes and 0.32
to 4.72 inches for cold drawn tubes.
We have a steelmaking facility in southern Romania, on an area of approximately 19 hectares, located in the city
of Calarasi, with an annual steelmaking capacity of 620,000 tons, supplying steel bars for European operations as
well as to other rolling mills in our industrial system.
The industrial facilities in Romania comprise:
•
•
•
•
•
•
•
a steel shop including an electric arc furnace, a ladle furnace and a continuous caster;
a floating mandrel mill;
four finishing lines, including heat treatment lines, upsetting machine, line pipe, threading, make-up and
inspection equipment facilities;
a coupling shop;
an accessories line;
a cold-drawing plant with finishing area; and
automotive and hydraulic cylinders components’ production machinery.
United Kingdom
We have a premium line threading facility, located in Aberdeen, in the northern United Kingdom. The facility
covers an area of 2 hectares. Production is concentrated in corrosion resistant alloys (“CRA”) grade, local
accessories original equipment manufacturing and a hub to service customers working in the North Sea region.
The facility has an annual production capacity of approximately 24,000 pieces, with a production range of 2 3⁄8 to
20 inches.
Asia Pacific, Middle East and Africa
In Asia Pacific, Middle East and Africa, we have two welded pipe manufacturing facilities in Saudi Arabia. We also
have threading facilities in Saudi Arabia, United Arab Emirates, China, Indonesia, Kazakhstan and Nigeria, and
premium joints and couplings facilities in China and Nigeria.
Saudi Arabia
We have a controlling participation in SSPC, a welded steel pipe producer, which operates five production lines
and produces welded pipes for the local oil & gas industry (OCTG and line pipe) and for the industrial and
construction sectors. The facility is situated in Dammam, Saudi Arabia on a surface of approximately 100 hectares.
Annual capacity is 390,000 tons covering a diameter range from ½ to 20 inches. We also have a threading facility
for the production of premium joints and accessories in Saudi Arabia, with an annual production capacity of
120,000 tons.
SSPC holds a 57.3% interest in GPC, a company established in 2010 and located in Jubail, Saudi Arabia, which
manufactures LSAW pipes, with an annual capacity of approximately 213,000 tons.
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Annual Report 2023
United Arab Emirates
In the United Arab Emirates, we have a new state-of-the-art threading facility in Abu Dhabi, on an area of
approximately 20 hectares, with an annual finishing capacity of approximately 70,000 tons. Tenaris’s facility is the
first local OCTG threading facility of its scale in the United Arab Emirates that can cater to Abu Dhabi National Oil
Company’s (“ADNOC”) premium technology demand.
China
We own a facility for the production of premium joints and couplings in Qingdao, on the east coast of China. The
facility has an annual production capacity of approximately 40,000 tons of premium joints. Additionally, we have
a facility that produces components for the local automotive industry.
Additionally, under our agreement with Baogang Steel Pipes (“Baogang”), we operate TBSP, which owns a steel
pipe premium connection threading plant to produce OCTG products in Baotou, China, with an annual capacity
of approximately 45,000 tons. Tenaris holds 60% of the shares of TBSP, while Baogang owns the remaining
40%.
Indonesia
We hold 89.17% of SPIJ, an OCTG processing business situated in Cilegon, Indonesia, with heat treatment,
premium connection threading facilities, coupling shop and a quality-testing laboratory, including an ultrasonic
testing machine, which has an annual processing capacity of approximately 120,000 tons. We also have a
premium joints accessories threading facility in the state of Batam.
Kazakhstan
We have a premium threading facility in Aktau, Kazakhstan. This state-of-the-art facility has the capacity to
produce 45,000 tons of OCTG annually for threading seamless pipes and gas-tight premium connections to serve
the local market.
Nigeria
We have a facility dedicated to the production of premium joints and couplings located in Onne, Nigeria, which
comprises a threading facility for both API and premium connections with an annual production capacity of
approximately 40,000 tons, inspection facilities and a stockyard. In addition, we own a 40% participation in Pipe
Coaters, a leading company in the Nigerian pipe coating industry, located in Onne, which supplies a wide variety
of products and services for the oil and gas industry, such as internal, anticorrosion, concrete and thermal
insulation coatings for onshore and offshore (including deepwater) applications.
Production Facilities – Others
We have facilities for the manufacturing of sucker rods in Villa Mercedes (San Luis, Argentina), Moreira Cesar (São
Paulo, Brazil), Veracruz (Mexico), Campina (Romania) and Conroe (Texas, United States). Our total annual
manufacturing capacity of sucker rods is approximately 3.1 million units.
In Argentina, we have equipment to provide oil and gas services, including fracking and coiled tubing services. In
the first half of 2024, we plan to invest $65 million to double our service capacity by incorporating new
equipment and developing a new operating base.
In Italy, we have the Piombino facility, which covers an area of approximately 67 hectares and comprises a hot-dip
galvanizing line and associated finishing facilities. Production is focused on small diameter seamless pipes finishing
for construction and plumbing applications in the domestic market, such as residential water, gas transport and
firefighting. The Piombino facility has an annual production capacity of approximately 100,000 tons.
In addition, we have specialized facilities in the Houston area producing coiled tubing and umbilical tubing:
•
A coiled tubing facility of approximately 150,000 square feet of manufacturing space on 4 hectares. The
plant consists of two mills and coating operations capable of producing coiled tubing products in various
grades, sizes and wall thicknesses. A new continuous heat treatment line has been recently installed.
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Annual Report 2023
•
An umbilical tubing facility of approximately 85,000 square feet of manufacturing space on 6 hectares.
While this facility is currently idle, it has the capacity to produce stainless or carbon steel tubing in various
grades, sizes and wall thickness.
In November 2023, we acquired Mattr’s pipe coating business unit, with nine plants located in Canada
(Edmonton, Alberta), Mexico (Veracruz), Norway (Orkanger), Indonesia (Batam City), the United Arab Emirates
(Ras Al Khaimah) and the United States (Channelview, Texas), and several mobile concrete plants, which
complement Tenaris’s global industrial footprint. The business also includes world-class R&D facilities in Toronto
and Norway and a wide intellectual property product portfolio.
Sales and Marketing
Net Sales
Our total net sales amounted to $14,869 million in 2023, compared to $11,763 million in 2022 and $6,521
million in 2021. For further information on our net sales see “Operating and Financial Review and Prospects –
Results of Operations”.
The following table shows our net sales by business segment for the periods indicated therein:
Millions of U.S. dollars
2023
For the year ended December 31,
2022
2021
Tubes
Others
Total
Tubes
14,185
684
14,869
95%
5%
100%
11,133
630
11,763
95%
5%
100%
5,994
528
6,521
92%
8%
100%
The following table indicates, for our Tubes business segment, net sales by geographic region:
Millions of U.S. dollars
Tubes
- North America
- South America
- Europe
- Asia Pacific, Middle East & Africa
Total Tubes
North America
2023
For the year ended December 31,
2022
2021
7,572
3,067
1,055
2,491
14,185
53%
22%
7%
18%
100%
6,796
2,213
867
1,257
11,133
61%
20%
8%
11%
100%
3,240
1,051
622
1,081
5,994
54%
18%
10%
18%
100%
Sales to customers in North America accounted for 53% of our sales of tubular products and services in 2023,
compared to 61% in 2022 and 54% in 2021.
We have significant sales and production facilities in each of the United States, Canada and Mexico, where we
provide customers with an integrated product and service offering based on local production capabilities
supported by our global industrial system. In the past few years, we have extended our integrated product and
service model, which we call Rig Direct®, throughout North America, and we operate a seamless pipe mill at Bay
City, Texas, which is strategically located to serve the Eagle Ford and Permian regions. On January 2, 2020, we
acquired IPSCO, a U.S. seamless and welded pipe producer, and, in September 2023, we acquired Republic
Tube’s OCGT pipe processing facility in Houston with heat treatment and threading operations, further
strengthening our local production capabilities and capacity to provide Rig Direct® services in the United States.
Under Rig Direct®, we manage the whole supply chain from the mill to the rig for customers under long-term
agreements, integrating mill production with customer drilling programs, reducing overall inventory levels and
simplifying operational and administrative processes. We first introduced the Rig Direct® model to Pemex in
Mexico in 1994, and since then we have supplied them with pipes on a just-in-time basis.
Today, we supply a large majority of our U.S. and Canadian customers for OCTG products with Rig Direct®
services.
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Annual Report 2023
Sales to our oil and gas customers in the United States and Canada are highly sensitive to oil prices and regional
natural gas prices. Over the past fifteen years, the drilling of productive shale gas and tight oil reserves, made
possible by new drilling technology, has transformed drilling activity and oil and gas production in the United
States and Canada. The United States has gone from being the largest global importer of oil to the largest global
producer of crude oil and LNG. U.S. crude oil production has increased from 5.6 million b/d in 2011 to 13.3
million b/d at the end of 2013 and has been the largest contributor to meeting growth in global oil demand
during this period as well as bringing the United States close to becoming a net exporter. This rapid increase in
production, however, has contributed, at times, to an excess of supply in the global oil market and consequent
fall in the price of oil. In 2020, the impact of the COVID-19 pandemic led to a sudden and substantial reduction in
global oil demand in the first half of 2020 and a collapse in oil prices. Global oil demand and prices have now
effectively recovered, along with economic activity, as COVID-19 vaccination programs were rolled out, and OPEC
and other producer countries, including Russia, implemented production cuts to lower supply below demand and
reduce inventory levels. At the same time, U.S. shale producers have restrained investments in response to the
post COVID-19 recovery of oil prices as they face financial market pressures to increase returns to shareholders
and limit investments in production growth.
Similarly, U.S. natural gas production has risen rapidly over the past decade and the United States became a net
exporter of natural gas for the first time in 2017 and in 2023 became the largest exporter of LNG to global
markets. In Canada, there has been a similar shift towards drilling of shale gas and tight oil reserves.
The drop in oil prices with the onset of the COVID-19 pandemic in the first half of 2020 resulted in a collapse in
U.S. drilling activity, with the number of active rigs falling to the lowest level recorded in over 40 years. Crude oil
production also fell back to 11.3 million b/d in each of 2020 and 2021, from 12.3 million b/d in 2019. However,
since then, there was a steady recovery in U.S. drilling activity through 2021 and 2022 with the number of active
rigs plateauing below pre-pandemic levels at the end of 2022. In 2023, however, drilling activity declined
moderately in the second half of the year reflecting lower oil prices compared to the levels reached in 2022, while
North American natural gas prices also declined due to increasing production, a low level of demand in the winter
heating season and capacity limits on LNG exports.
The level of drilling activity in North America, and consequently demand for our products and services, could also
be affected by actions taken by the governments of the region to accelerate the energy transition by reducing
demand for oil and gas and restricting drilling activity.
During 2020, demand for, and sales of, our OCTG products in the United States and Canada collapsed along with
drilling activity. As a result, we closed down many of our facilities in the United States and, we dismantled our
Prudential welded pipe mill in Calgary, Canada, and integrated welded pipe production at our seamless pipe mill
in Sault Ste. Marie, Ontario. Towards the end of 2020, demand for and sales of OCTG in the United States and
Canada began a recovery which continued throughout 2021 and 2022. During this recovery period we reopened
many of the facilities we had shut down in 2020 and brought production at our Bay City mill to full capacity. A
particular feature of this recovery was the exceptional price levels for hot rolled coil in the North American market
which made the production of welded pipes uneconomic throughout 2021 and delayed the restart of U.S.
welded pipe production into 2022. The ramp up of production capacity in the United States was further affected
by difficulties in hiring qualified workforce in the post-COVID economy. In 2023, despite the slowdown in drilling
activity, demand and consumption of OCTG products remained close to the levels seen in 2022, as average OCTG
consumption per rig increased along with drilling efficiencies.
During 2018, the U.S. government introduced, under Section 232, tariffs and quotas on the imports of steel
products, including steel pipes, with the objective of strengthening domestic production capacity utilization and
investment. The proportion of the OCTG market supplied by imports initially declined from around 60% prior to
the imposition of tariffs and quotas to around 40% at the end of 2018. OCTG imports subsequently rose to
around 50% during the recovery from the pandemic when U.S. production was constrained but has fallen to
40% during 2023 as distributors reacted to a rise in inventory levels by cutting back on OCTG import purchases.
On October 27, 2021, the DOC initiated antidumping duty investigations on OCTG imports from Argentina,
Mexico, and Russia and countervailing duty investigations of OCTG from Russia and South Korea. On October 27,
2022, the ITC determined that the imports under investigation caused injury to the U.S. OCTG industry. Tenaris
and other parties have appealed the agency determinations from the investigation to the Court of International
Trade. In addition, in response to a request from the Government of Argentina, the World Trade Organization
(“WTO”) established a panel of experts to consider whether the DOC’s antidumping order applicable to
Argentina is consistent with the international obligations of the United States. As a result of the investigation, and
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Annual Report 2023
unless overturned on appeal, Tenaris is required to pay antidumping duties (at a rate of 78.30% for imports
from Argentina and 44.93% for imports from Mexico) while the order is in effect. Tenaris has been paying
antidumping duty deposits since May 11, 2022, reflecting the amount of such deposits in its costs. The deposit
rates may be reset periodically based on the results of the administrative review process. It is possible that,
through the periodic review process, the deposits may be either returned to Tenaris, in whole or in part, or may
be increased.
Our sales in the United States are also affected by the level of investment of oil and gas companies in exploration
and production in offshore projects.
Oil and gas drilling in Canada is subject to strong seasonality, with the peak drilling season in Western Canada
being during the winter months when the ground is frozen. During the spring, as the ice melts, drilling activity is
severely restricted by the difficulty of moving equipment in muddy terrain.
On June 30, 2021, Canada initiated an antidumping investigation on OCTG from Mexico. A full investigation was
conducted and on January 26, 2022, the Canadian International Trade Tribunal found that Mexican imports were
not injuring the Canadian OCTG industry and closed the inquiry without imposing any duties.
In Mexico, we have enjoyed a long and mutually beneficial relationship with Pemex, the Mexican state-owned oil
company, and one of the world’s largest crude oil and condensate producers. In 1994, we began supplying
Pemex with Rig Direct® services. At the end of 2022, we renewed our long-term agreement with Pemex for an
additional three-year period.
At the end of 2013, Mexico reformed its constitution to allow increased private and foreign investment in the
energy industry, including through participation in profit and production sharing contracts and licenses, and
Pemex has been transformed into a state-owned production company but ceased to have a monopoly on
production. In the last few years, the Mexican government made various attempts to modify rules and regulations
governing the energy market in Mexico with potential impact on the energy supply and its cost. Recently, the
Mexican President announced a new proposal for an ambitious constitutional reform, which covers a wide range
of topics, including energy matters, with the intention of granting state-owned enterprises, particularly CFE and
Pemex, priority over private companies on electricity dispatch. Pemex is charged with reversing production
declines and in response, has been delaying payments to suppliers, including Tenaris. For more information on the
proposed reform to the energy market in Mexico and our credit exposure to Pemex, see “Key Information – Risk
Factors – Risks Relating to Our Business and Industry – Adverse economic or political conditions in the countries
where we operate or sell our products and services may decrease our sales or disrupt our manufacturing
operations, thereby adversely affecting our revenues, profitability and financial condition”.
Drilling activity in Mexico and demand for our OCTG products dropped only slightly in 2020 as the country was
protected from lower oil prices by a price hedging program. Over the past three years, drilling activity in Mexico
has increased moderately as the Mexican government and Pemex implemented measures to reverse production
decline while some investments pursuant to the energy reform process are being implemented cautiously.
South America
Sales to customers in South America accounted for 22% of our sales of tubular products and services in 2023,
compared to 20% in 2022 and 18% in 2021.
Our largest market in South America is Argentina. We also have significant sales in Brazil, Colombia and Guyana.
We have manufacturing subsidiaries in Argentina, Brazil, Colombia and Ecuador, while in Guyana, we provide in-
country services.
Our sales in South America are sensitive to the international price of oil and its impact on the drilling activity of
participants in the oil and gas sectors, as well as to general economic conditions in these countries. In addition,
sales in Argentina, as well as export sales from our manufacturing facilities in Argentina, are affected by
governmental actions and policies, such as the taxation of oil and gas exports, measures affecting gas and
gasoline prices in the domestic market and other matters affecting the investment climate. Sales in Brazil are also
affected by governmental actions and policies and their consequences, such as measures relating to the taxation
and ownership of oil and gas production activities and the operations of Petrobras. For more information, please
see “Key Information – Risk Factors – Risks Relating to Our Business and Industry – Adverse economic or political
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Annual Report 2023
conditions in the countries where we operate or sell our products and services may decrease our sales or disrupt
our manufacturing operations, thereby adversely affecting our revenues, profitability and financial condition”.
A principal component of our marketing strategy in South American markets is the establishment of long-term
supply agreements and Rig Direct® services with national and international oil and gas companies operating in
those markets.
In Argentina, we have a significant share of the market for OCTG products. We have longstanding business
relationships with YPF S.A. (“YPF”), the Argentine state-controlled company, and with other operators in the oil
and gas sector. We strengthened our relationship with YPF in 2013 through a long-term agreement, which was
renewed for an additional five-year term at the beginning of 2022, under which we provide Rig Direct® services
with the objective of reducing YPF’s operational costs as it aims to increase production through investments in
Argentina’s shale oil and gas reserves. Drilling activity fell significantly during 2019 after an electoral process in
Argentina. In 2020, our sales were affected by ongoing uncertainties regarding the energy policies that would be
adopted by the incoming government as well as the onset of the COVID-19 pandemic. Activity recovered during
the last three years. The principal restraint on further increases in activity, particularly in the Vaca Muerta shale
play, is the lack of pipeline capacity for exporting oil and for transporting gas to the main consumption centers in
Buenos Aires. New pipeline infrastructure is being installed; the first phase of a new gas pipeline and two oil
export pipelines were completed in 2023 and further pipeline infrastructure is expected over the next years. We
reactivated our welded pipe mill in Valentin Alsina, province of Buenos Aires, to supply pipes for the pipelines
already constructed and supplemented deliveries with welded pipes from our mill in Brazil.
In Brazil, we have a longstanding business relationship with Petrobras. We supply Petrobras with casing and
tubing (including premium connections) and line pipe products, many of which are produced in our Brazilian
welded pipe facility, for both offshore and onshore applications. More recently, we have increased the sale of
imported seamless products to Petrobras for offshore use, including the supply of seamless casing with premium
connections, accessories and Rig Direct® services for use in the pre-salt area and seamless line pipe for use in
offshore risers. With the development of Brazil’s deepwater pre-salt complex, our mix of products sold in Brazil
has evolved from one including mainly line pipe for onshore pipeline projects to one which includes large
diameter conductor and surface casing, intermediate and production casing and line pipe for use in deepwater
applications. In 2020, with the onset of the COVID-19 pandemic and the collapse in oil prices, Petrobras reduced
its onshore drilling operations to focus on pre-salt offshore developments. In 2022 and particularly in 2023,
offshore drilling activity increased as a result of the development of the Buzios and other pre-salt fields by
Petrobras as well as other investments by major oil companies. Consumption of OCTG products in Brazil, which
had been at a relatively low level for several years as Petrobras reduced its investments in response to budgetary
constraints, concentrating on developing its most productive reserves in the pre-salt fields, doubled in 2023 and is
expected to remain at a similar level in 2024. Demand for line pipe for pipeline projects also declined to very low
levels with only one major project implemented in the past seven years, but line pipe demand is expected to pick
up in 2024 with a major offshore pipeline authorized. In response to market-opening measures and the
attractiveness of the deepwater reserves, major oil companies have increased their investments in Brazil, while
Petrobras is focusing investments in world class assets in deepwater.
In Colombia, we have established a leading position in the market for OCTG products since 2006, following our
acquisition of TuboCaribe, a welded pipe manufacturing facility located in Cartagena. Although the market was
deeply affected by low oil prices between 2014 and 2016, it has grown over the past decade as the country
encouraged investment in its hydrocarbon industry and opened its national oil company to private investment. In
2020, the pandemic-related collapse in oil prices resulted in a drop of drilling activity which recovered in 2021 and
2022. In 2023, however, drilling activity has been affected as the new government introduced policies aimed at
reducing exploration activity while local protests and security concerns increased at some drilling locations. Our
principal customer in Colombia is Ecopetrol S.A. (“Ecopetrol”), to which we supply Rig Direct® services. In 2022
we renewed our agreement with Ecopetrol for two years.
In Guyana and neighboring Suriname, offshore drilling activity has been increasing rapidly over the past few years
following the discovery of large, cost competitive oil reserves. We are supplying casing for many of the exploration
wells and, at the end of 2021, we were awarded a 10-year contract to supply large and medium diameter casing
with Rig Direct®-alike services to the main deepwater offshore development projects in the Starbroek block.
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Annual Report 2023
These developments are transforming the Guyana economy and are yielding a significant new source of oil to
global markets.
We also have sales in Ecuador, supplying Petroamazonas Ecuador S.A., which merged with EP PetroEcuador, the
national oil company, as well as private operators. To increase local content, we have established a local OCTG
threading facility in Machachi.
We were present in the Venezuelan OCTG market for many years and we maintained business relationships with
Petróleos de Venezuela S.A. and the joint venture operators in the oil and gas sector until the imposition of
economic sanctions by the Office of Foreign Assets Control (“OFAC”). Additionally, we maintained business
relationships with Chevron in Venezuela until April 22, 2020, when their sanctions license expired. Our sales in
Venezuela declined to low levels in 2020, with no sales in 2021 and 2022. Recently, Chevron has been authorized
to resume certain operations, which is leading to a limited resumption of sales in Venezuela but uncertainty
remains about the course of future sanctions.
Europe
Sales to customers in Europe accounted for 7% of our sales of tubular products and services in 2023, compared
to 8% in 2022 and 10% in 2021.
Our single largest country market in Europe is Italy. The market for steel pipes in Italy (as in much of the European
Union) is affected by general industrial production trends, especially in the mechanical and automotive industry,
and by investment in power generation, petrochemical and oil refining facilities. Sales to the mechanical and
automotive industries and for HPI and power generation projects in Italy and the rest of Europe in 2020 were
affected by lower prices reflecting increased competitive pressures, but volumes were relatively stable. In 2021,
activity and our sales increased. In 2022, although activity was affected by the Russian invasion, our sales
increased as prices rose to compensate higher costs, while in 2023, although activity declined, our sales remained
stable reflecting a change in the competitive environment.
In Europe we also have significant sales to the oil and gas sector, particularly in the North Sea. Demand from this
market is affected by oil and gas prices in the international markets and their consequent impact on oil and gas
drilling activities in the North Sea and other areas, like Romania. In addition, we ceased sales to Russia that would
breach applicable sanctions imposed by the U.S., and the EU following the Russian invasion of Ukraine. Sales in
the North Sea rose during 2023 as drilling and gas pipeline construction activity increased.
Europe is also a region which we expect will be at the forefront of developments in low-carbon energy, including
hydrogen storage and transportation, CCS, geothermal and waste-to-energy power generation. We are
participating in these market segments where we expect to see growth in sales in the coming years.
Asia Pacific, Middle East and Africa
Sales to customers in the Asia Pacific, Middle East and Africa accounted for 18% of our sales of tubular products
and services in 2023, compared to 11% in 2022 and 18% in 2021.
Our largest single country markets in the region are Saudi Arabia and the United Arab Emirates. In Saudi Arabia,
in response to policies that have been implemented to diversify the economy and increase local manufacturing,
we have developed a substantial local manufacturing presence, first through the establishment of local premium
threading facilities, and, more recently, through the acquisition of controlling participations in two welded pipe
producers. In January 2019, we acquired 47.8% of SSPC, a listed ERW steel pipe producer. With the acquisition
of SSPC, we also acquired a 35% share interest in GPC, a Saudi-German joint venture, established in 2010 and
located in Jubail, Saudi Arabia, which manufactures LSAW pipes. In May 2023, we increased our participation in
GPC to 57.3% when the German shareholder in GPC decided to exit. In 2022, we entered into a long-term
agreement with Saudi Aramco for the supply of seamless OCTG products that prioritizes local production where
possible. In 2023, we entered into a similar long-term agreement for LSAW OCTG products, while we also have
medium-term supply agreements with Saudi Aramco for ERW OCTG and line pipe products.
In the United Arab Emirates, we inaugurated an industrial complex with a newly-constructed premium threading
facility, dedicated training facilities and an expanded service yard in February 2024. This followed the award, in
August 2019, of a long-term agreement with Rig Direct® conditions, valued at $1.9 billion, to supply
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Annual Report 2023
approximately half of the OCTG requirements of Abu Dhabi National Oil Company (“ADNOC”) in Abu Dhabi over
the following five to seven years.
We have a wide-ranging presence in the rest of the region, with industrial facilities in Indonesia, China,
Kazakhstan and Nigeria and service centers in various additional countries.
Our sales in this region remain sensitive to international prices of oil and gas and their impact on drilling activities
as well as to the production policies pursued by OPEC, and, more recently, OPEC+ countries, many of whose
members are located in this region. In the past few years, oil and gas producing countries in the Middle East, led
by Saudi Arabia, have increased investments to develop gas reserves to fuel regional gas-based industrial
development, which have positively affected their consumption of premium OCTG products. Saudi Arabia, in
particular, is pursuing strong growth in conventional and unconventional gas drilling activity. The main national oil
companies in the Gulf have also increased investments to add oil and LNG production capacity as they seek to
accelerate the monetization of their oil and gas reserves, although Saudi Arabia recently announced that it would
curtail its oil production capacity expansion plans.
In North Africa, there have been significant discoveries and development of offshore gas reserves in the
Mediterranean in recent years and international oil companies have increased their investments in the region. In
sub-Saharan Africa, after several years of limited investments, international oil companies began to increase their
investments in exploration and production in offshore projects in 2022.
In the Caspian region, major oil companies operating in Kazakhstan and Azerbaijan increased their investments
and drilling activity following a recovery of oil prices in 2017. In 2020 and 2021, however, our sales were affected
by the impact of the COVID-19 pandemic on the operations of our customers and the impact on drilling activity of
adherence to the production cuts agreed by the OPEC+ countries in response to the collapse of oil demand due to
the pandemic. Since then, drilling activity and our sales have remained at low levels.
In the past few years, uprisings affected drilling activity in countries such as Syria, Libya and Yemen. In addition,
for a number of years, U.S. and E.U. sanctions have affected production and exports in Iran.
In Indonesia and other markets in South East Asia and Oceania, drilling activity, particularly offshore drilling
activity, is mainly affected by demand and prices for natural gas and LNG. The region is a major producer of
natural gas and LNG particularly for the energy-hungry economies of China and North-East Asia.
Our sales in China are concentrated on premium OCTG products used in oil and gas drilling activities. Over the
past 15 years, China has significantly reduced its imports of OCTG products as local producers compete
ferociously in an oversupplied market. We continue, however, to seek new markets in niche applications and in
2016 we opened a components facility for processing pipes for use in airbags for automobiles, which we recently
expanded for the second time. In 2020, we established a joint venture with Baotou Steel, a major domestic
supplier of seamless pipes to the onshore oil and gas fields, for the construction of a premium threading facility
located within our partner’s steelmaking facilities in Inner Mongolia. The new facility, which finishes pipes
produced mainly by our joint venture partner, began production during the first quarter of 2022. Our
participation in the joint venture is 60%. During 2022, Baotou Steel and Baosteel International Group
(“Baosteel”) merged their seamless pipe businesses, but at the end of 2023, this merger was reversed, and we are
resuming operations with our original joint venture partner.
In Japan, our former subsidiary, NKKTubes, competed against other domestic producers. In November 2022 we
entered into a definitive wrap-up agreement with JFE to terminate our joint venture and cease NKKTubes’
operations. The market for steel pipe products in Japan is mostly industrial and depends on general factors
affecting domestic investment, including production activity. With the closure of manufacturing and production
operations of NKKTubes in June 2022, we have largely ceased to serve this market.
Our sales in the greater region could be adversely affected by political and other events in the region, such as
armed conflicts, terrorist attacks and social unrest, which could materially impact the operations of companies
active in the region’s oil and gas industry. Our sales in the region can also be affected by the levels of inventories
held by the principal national oil companies and their effect on purchasing requirements. For more information,
please see “Key Information – Risk Factors – Risks Relating to Our Business and Industry – Adverse economic or
political conditions in the countries where we operate or sell our products and services may decrease our sales or
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Annual Report 2023
disrupt our manufacturing operations, thereby adversely affecting our revenues, profitability and financial
condition”.
Sales in the region declined to a low level in 2021 as a result of various factors, including the slowdown in
investments in drilling activity as a result of the pandemic and reduction in oil demand and prices and ongoing
inventory reductions at some of the region’s largest consumers such as Saudi Arabia and the United Arab
Emirates. In 2022, our sales in the region began to recover marginally while in 2023 our sales benefited from a
strong recovery in activity and inventory shortages. We expect sales will increase further in 2024 led by Saudi
Arabia where we won a major tender to help Saudi Aramco to replenish inventory levels.
Others
Our other products and services include sucker rods used in oil extraction activities, oil and gas services, namely
fracking and coiled tubing services in Argentina, sales of pipe for plumbing applications from our Italian Piombino
mill, coiled tubes used in oil and gas extraction activities, and sales of raw materials and energy that exceed our
internal requirements.
On November 30, 2023, we acquired the pipe coating business from Mattr, which has nine pipe coating facilities
and two R&D centers around the world, and is a global leader in anti-corrosion and insulation coating for offshore
pipelines. The acquired plants are located close to our coating plants in Argentina, Brazil, the United States, Italy
and Saudi Arabia and are largely complementary to our operations. Since December 1, 2023, we started to report
the sales and results of the newly acquired business in the “Others” segment, because most of the coating service
from such business is performed on third party pipes. Sales and results of pipe coating services on Tenaris’s own
tubes are reported in our “Tubes” segment.
Net sales of other products and services amounted to 5% of total net sales in 2023, compared to 5% in 2022
and 8% in 2021.
During 2022, we closed down our Brazilian industrial equipment business and, in 2021, we sold our Geneva mill
(pipes for construction activities) in the United States as well as a small Saudi equipment manufacturing and
erection business that we acquired during our SSPC acquisition.
Competition
The global market for steel pipe products is highly competitive. Seamless steel pipe products, which are used
extensively in the energy industry particularly for offshore, high pressure, high stress, corrosive and other complex
applications, are produced in specialized mills using round steel billets and specially produced ingots. Welded steel
pipe products are produced in mills which process steel coils and plates into steel pipes. Steel companies that
manufacture steel coils and other steel products but do not operate specialized seamless steel mills are generally
not competitors in the market for seamless steel pipe products, although they often produce welded steel pipes or
sell steel coils and plates used to produce welded steel pipes.
The production of steel pipe products following the stringent requirements of major oil and gas companies
operating in offshore and other complex operations requires the development of specific skills and significant
investments in manufacturing facilities. By contrast, steel pipe products for standard applications can be produced
in most seamless pipe mills worldwide and sometimes compete with welded pipe products for such applications
including OCTG applications. Welded pipe, however, is not generally considered a satisfactory substitute for
seamless steel pipe in high-pressure or high-stress applications.
Over the past two decades, substantial investments have been made, especially in China but also in other regions
around the world, to increase production capacity of seamless steel pipe products. Production capacity for more
specialized product grades has also increased. With the downturn between 2014 and 2016 in the price of oil and
demand for tubes for oil and gas drilling, the overcapacity in steel pipe and seamless steel pipe production
worldwide became acute, extending beyond commodity grades. This situation is accentuated by the prospect of
an accelerated energy transition. Effective competitive differentiation and industry capacity closures will be key
factors for Tenaris.
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Annual Report 2023
Our principal competitors in steel pipe markets worldwide are described below.
•
•
•
•
Vallourec S.A. (“Vallourec”), a French company, has mills in Brazil, China, and the United States. Vallourec
has a strong presence in the U.S. and Brazilian markets for OCTG and line pipe products and the Brazilian
market for industrial products, as well as a significant market share in the international market with
customers primarily in the Middle East, Africa and Asia Pacific. Vallourec is an important competitor in the
international OCTG market, particularly for high-value premium joint products, where it operates a
technology partnership for VAM® premium connections with Nippon Steel Corporation (“NSC”). Prior to
the collapse in oil prices in 2014 to 2016, Vallourec increased its production capacity by building mills in
Brazil (jointly with NSC) and Youngstown, Ohio, acquiring tubular businesses in the United States and
Saudi Arabia, and acquiring a Chinese seamless steel producer. Since then, Vallourec has carried out two
major financial restructuring processes and is now emerging as a financially stable company with a reduced
industrial perimeter under new management and owners. In the second financial restructuring, Vallourec’s
creditors, including Apollo, a private equity house, assumed effective control. Under the same restructuring,
Vallourec closed its German mills during 2023 and invested EUR100 million in its Brazilian mills to enable
the transfer of its specialized products for oil and gas customers from Germany to Brazil. On March 12,
2024, Vallourec announced that ArcelorMittal S.A. (“ArcelorMittal”) had agreed to acquire Apollo’s entire
shareholding (28.4% of voting rights and 27.5% of the share capital) and that ArcelorMittal would
become its reference shareholder.
U.S. Steel Corporation (“U.S. Steel”), a large U.S. steel manufacturer, has long been a significant player in
the U.S. market for seamless OCTG and line pipe. During the pandemic-induced downturn, it closed its
large diameter seamless pipe mill in Lorain and the welded pipe facilities it acquired from Lone Star in 2008
to focus its pipe business on its medium range seamless pipe mill in Fairfield, Alabama where it also
constructed an EAF steel mill to have a fully integrated facility. In December 2023, U.S. Steel and NSC
announced that they had entered into a definitive agreement pursuant to which NSC will acquire U.S.
Steel; the transaction remains subject to approval by U.S. Steel’s shareholders and regulatory approvals.
Japanese companies NSC and, to a lesser extent, JFE together enjoy a significant share of the international
market, having established strong positions in markets in the Far East and the Middle East. They are
internationally recognized for their supply of high-alloy grade pipe products. Over the previous decade,
NSC had increased its capacity to serve international markets through the construction with Vallourec of a
new seamless pipe mill in Brazil, and further strengthened its ties with Vallourec through participating in
Vallourec’s 2016 capital increase and combining their respective Brazilian operations. As part of the latest
financial restructuring of Vallourec, NSC relinquished its participation in the Brazilian operation and ceded
its reference shareholder position in Vallourec. In 2022, NSC, as part of a general restructuring of its
steelmaking operations, closed one of its three seamless pipe production mills and announced the closure
of its large diameter welded pipe mill and its exit from the large diameter welded line pipe market.
However, in December 2023, U.S. Steel and NSC announced that they had entered into a definitive
agreement pursuant to which NSC would acquire U.S. Steel (including its steel pipe operations); the
transaction remains subject to approval by U.S. Steel’s shareholders and regulatory approvals.
Over the past two decades, TMK, a Russian company, led the consolidation of the Russian steel pipe
industry, invested to modernize and expand its production capacity in Russia and expanded internationally
through acquisitions into Eastern Europe and the United States. TMK also expanded in the Middle East
through the acquisition of a controlling interest in Gulf International Pipe Industry LLC, a welded pipe
producer in Oman. More recently, however, TMK adopted a strategy of monetizing its international assets
by reducing its participation in Gulf International Pipe and selling IPSCO to Tenaris, as well as strengthening
its position in its domestic market by acquiring Chelpipe, the second Russian producer of seamless pipes in
2021. In 2022, following the Russian invasion of Ukraine, the American Petroleum Institute (“API”)
withdrew its license for products produced in TMK’s mills in Russia. Russian producers or their controlling
shareholders are now subject to U.S., EU and UK sanctions, among others, and are now largely prevented
from competing in several markets.
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Annual Report 2023
•
•
•
•
•
•
In the Middle East, particularly in Saudi Arabia, which has implemented policies to encourage local
production for its oil and gas industry, several pipe mills were established, including a seamless pipe mill
built by Jubail Energy Services Company (“JESCO”), a company established with majority participation from
a state-backed industrial development company, and a seamless pipe mill originally built by a joint venture
of ArcelorMittal and local shareholders (“AMTJ”). These local players have been strengthening their
capabilities and are taking an increasing share of the pipes supplied to Saudi Aramco as well as exporting
to other countries in the Middle East and the rest of the world. In 2021, JESCO and AMTJ, who were both
operating with losses, combined their operations at the behest of the Saudi Public Investment Fund.
Over the past two decades, Chinese producers increased production capacity substantially and strongly
increased their exports of steel pipe products around the world. Due to unfair trading practices, many
countries, including the United States, the European Union, Canada, Mexico and Colombia, have imposed
anti-dumping restrictions on Chinese imports to those regions. In 2009, the largest Chinese producer of
seamless steel pipes, Tianjin Pipe (Group) Corporation Limited (“TPCO”), announced a plan to build a new
seamless pipe facility in the United States in Corpus Christi, Texas; heat treatment and pipe finishing
facilities were constructed but steelmaking and hot rolling facilities have not been completed. As part of a
financial restructuring, a 51% shareholding in TPCO was sold to Shanghai Electric Group and has now
been sold on to Citic Group Corporation Ltd. (“Citic”), a state-owned conglomerate. Although producers
from China compete primarily in the “commodity” sector of the market, several of these producers,
including Baosteel and TPCO, have developed and are selling more sophisticated products, particularly in
the domestic market.
Although the tubes and pipes business in the United States and Canada has experienced significant
consolidation over the years, many new players have built pipe mills in the United States. These include, in
addition to TPCO, Boomerang LLC, a company formed by a former Maverick executive that opened a
welded pipe mill in Liberty, Texas, now known as PTC Liberty Tubulars and part of the PTC Alliance;
Benteler A.G. (“Benteler”), a European seamless pipe producer that built a new seamless pipe mill in
Louisiana, which opened in September 2015; and a plethora of welded pipe mills established by
subsidiaries of foreign pipe producers, such as SeAH Steel (“SeAH”), of Korea and JSW Group (“JSW”), of
India. North American pipe producers, including US Steel, are largely focused on supplying the U.S. and
Canadian markets, where they have their production facilities.
Korean welded pipe producers, who have a limited domestic market, have targeted the U.S. market for
standard applications. They have gained a significant market position, despite the application of anti-
dumping duties for unfair trading practices and being subject to Section 232 quotas. One of them, SeAH,
has acquired and built local welded pipe production facilities in the United States.
Benteler, Tubos Reunidos S.A. of Spain (“Tubos Reunidos”), and Voest Alpine A.G. of Austria (“Voest
Alpine”) each have a significant presence in the European market for seamless steel pipes for industrial
applications. Voest Alpine also has a relevant presence in the U.S. and Canadian OCTG markets and some
other international OCTG markets. In 2016, Tubos Reunidos opened an OCTG threading facility targeting
international markets, including the United States.
ArcelorMittal has seamless pipe mills in Romania and South Africa as well as a 33.3% participation as
technical partner in AMTPJ in Saudi Arabia. It also has a number of welded pipe mills in North America and
Europe, supplying the industrial and automotive sectors. On March 12, 2024, ArcelorMittal announced that
it had agreed to acquire 28.4% of the voting rights (representing a 27.5% of the share capital) in
Vallourec, expecting to become its reference shareholder.
Producers of steel pipe products can maintain strong competitive positions in markets where they have their pipe
manufacturing facilities due to logistical and other advantages that permit them to offer value-added services and
maintain strong relationships with domestic customers, particularly in the oil and gas sectors. Our subsidiaries
have established strong ties with major consumers of steel pipe products in their home markets, reinforced by Rig
Direct® services, as discussed above.
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Annual Report 2023
Capital Expenditure Program
During 2023, our capital expenditures, including investments at our plants and information systems (“IT”),
amounted to $619 million, compared to $378 million in 2022 and $240 million in 2021. Of all capital
expenditures made during 2023, $571 million were invested in tangible assets, compared to $346 million in 2022
and $214 million in 2021.
In 2023, we focused on improvements with environmental impact in line with our target of reducing carbon
emissions intensity by 30% by 2030, compared to a 2018 baseline, enhancing efficiency in our industrial plants,
improving automation and digitalization of our processes, and increasing product differentiation.
The major highlights of our capital spending program during 2023 included:
•
•
•
•
•
•
•
the completion of our first wind farm in Argentina;
the upgrade of the Koppel steel shop exhaust fumes system, to reduce emissions and improve health and
safety conditions in the mill (investment ongoing and expected to be completed in 2024);
the construction of a new threading line, service center and offices in Abu Dhabi, consolidating our
position in the country;
the revamping and upgrade of our existing lines to improve the standards of industrial efficiency,
including the heat treatment capacity increase in our Dalmine facility in Italy, coupling shops in Argentina,
Mexico and Colombia;
investments in connection with our differentiation strategy, including to increase capacity on special steel
grades in our mills;
automation of existing lines in our Tamsa (Mexico), Conroe and Koppel (United States) and Siderca in
(Argentina) facilities; and
offices redesign project, aligning workspace to our new way of working.
Investments in information systems and other intangible assets totaled $48 million in 2023, compared to $32
million in 2022 and $26 million in 2021.
As planned, our 2023 IT capital expenditure program focused on:
•
•
•
operational continuity, with an increased investment in updating infrastructure to mitigate the effects of
obsolescence;
industrial infrastructure and cybersecurity, continuing with our multi-year program to strengthen
cybersecurity and mitigate risks to our operational technology, with particular focus on our Veracruz,
Campana and Zalau mills; and
increased efficiency and productivity in our business cycle, including through standardization of our
manufacturing execution systems in the United States (allowing our U.S. multi-site industrial landscape to
operate as a single plant) and through continuous advancement on our new production programming
and scheduling system (“SIP”) in Mexico and Romania.
We have completed the technological integration of the IPSCO facilities, and our investment portfolio for 2024 is
expected to focus on IT synchronization of newly acquired businesses.
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Annual Report 2023
Capital expenditures are expected to increase to around $700 million in 2024. Around 30% of our capex, will be
directed to projects that are expected to contribute to our 2030 target for reducing the carbon emission intensity
of our operations and other environmental objectives. In particular, our investment program for 2024 includes:
•
•
•
•
•
•
the construction of a second wind farm in Argentina;
the revamping and upgrade of Siderca’s electric arc furnace with energy efficient Consteel® technology;
the completion of the upgrade of the Koppel steelmaking exhaust fumes system, to reduce emissions and
improve the mill’s health and safety conditions;
the revamping and upgrade of our existing lines to improve the standards of industrial efficiency,
including the revamping of 20” medium tubes mill finishing line in Dalmine, Italy, and the increase of
capacity in coupling shops in Mexico;
the upgrading of Dopeless® production capabilities in Dalmine, Italy and Silcotub, Romania; and
offices redesign project aligning workspace to our new way of working.
Raw Materials and Energy
The majority of our seamless steel pipe products are manufactured in integrated steelmaking operations using the
electric arc furnace route, with the principal raw materials being steel scrap, DRI, HBI, pig iron and ferroalloys. In
Argentina we produce our own DRI from iron ore using natural gas as a reductant. Our integrated steelmaking
operations consume significant quantities of electric energy, mostly purchased from the local electricity markets,
though in part sourced from our own renewable, natural gas and thermal-electric power production. Our welded
steel pipe products are processed from purchased steel coils and plates.
The weight of the different steelmaking raw materials and steel vary with the proportion of seamless and welded
pipes in the total production mix and among the different production facilities in our industrial system, as well as
the specifications of the final products and other factors. On average, in 2023, steel scrap, pig iron, HBI and DRI
represented approximately 23% of our steel pipe products’ costs, while purchased steel in the form of billets, coils
or plates represented approximately 17%, with direct energy accounting for approximately 4%.
The above raw material inputs are subject to price volatility caused by supply, political and economic situations,
financial variables and other unpredictable factors. For further information on price volatility, see “Key Information
– Risk Factors – Risks Relating to Our Business and Industry – Increases in the cost of raw materials, energy and
other costs, limitations or disruptions to the supply of raw materials and energy, and price mismatches between
raw materials and our products may hurt our profitability”. The costs of steelmaking raw materials and of steel
coils and plates increased on average in 2021 compared to 2020 and were subject to high levels of volatility
during 2022 as they were affected by the Russian-Ukraine armed conflict, and the sanctions being imposed on
Russian individuals, companies and institutions. They returned to more stable levels in 2023. For more
information, see “Key Information – Risk Factors – Risks Relating to Our Business and Industry – An escalation of
the Russia-Ukraine war and other armed conflicts may adversely affect our operations”.
Steel scrap, pig iron and HBI
Steel scrap, pig iron and HBI for our steelmaking operations are sourced from local, regional and international
suppliers. In Argentina we produce our own DRI and source ferrous scrap domestically through a wholly owned
scrap collecting and processing subsidiary. In Italy we purchase pig iron and ferrous scrap from local and regional
markets. In Mexico we import our pig iron and HBI requirements and purchase scrap from domestic and
international markets. In Romania we source ferrous scrap mainly from the domestic market and we import pig
iron. In the United States, we source scrap from the local market to supply our steelmaking facility, and also
source pig iron from international markets.
International prices for steel scrap, pig iron and HBI can vary substantially in accordance with supply and demand
conditions.
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Annual Report 2023
Annual scrap prices decreased slightly in 2023. As a reference, prices for Scrap Shredded U.S. East Coast,
published by Platts, averaged $376 per ton in 2023 and $429 per ton in 2022, while they averaged $441 per ton
in 2021. Scrap prices had spiked following the Russian invasion of Ukraine as both countries are significant
exporters of semi-finished steel and pig iron.
New decarbonization efforts, including new regulation impacting the oil industry, as well as the increasing
preference of EAF over BF has supported prices and this trend is expected to continue as scrap availability
becomes increasingly scarce.
In 2022 and 2023, Brazil was the largest pig iron supplier to the United States because supply from Russia and
Ukraine decreased significantly. As global economic growth began to decelerate, prices decreased during the
second half of 2022. This decrease is attributed also to more availability as supply chains have rebalanced and,
contrary to scrap, decarbonization efforts are resulting in decreased demand for pig iron. Prices remained
relatively stable during 2023, reaching levels around $400 per ton in early 2024.
Iron ore
We consume iron ore in the form of pellets for production of DRI in Argentina. Siderca’s consumption of iron ore
during 2023 was approximately 971 thousand tons, supplied by Vale International S.A. and Samarco Mineração
S.A. from Brazil, and Iron Ore Company (“IOC”) from Canada. Annual iron ore prices remained stable during
2023 in comparison to 2022, but remain at high levels compared to historical averages. As a reference, prices for
IODEX 62% Fe Index, published by Platts, averaged $120 per ton in 2023 and $120 per ton in 2022, in
comparison to $160 per ton in 2021. After reaching $136 per ton in December 2023, iron ore prices have fallen
back to $125 per ton in February 2024.
Pellet premiums price averaged $45 per ton in 2023, and $72 per ton in 2022, while they averaged $60 per ton
in 2021. The DRI pellet market started with a supply squeeze in 2022 as Ukrainian exports were affected by the
conflict and India imposed heavy export tariffs. In the second half of 2022, the market suffered from weak
demand mainly by European and Asian purchasers. In 2023 prices decreased as India removed the export tariffs,
and demand from Europe remained weak throughout the year.
Round steel bars
We mainly satisfy our steel bars and ingots requirements with materials produced in our steelmaking facilities in
Argentina, Italy, Mexico, Romania and the United States. We complement this internal supply with limited
purchases of steel bars and ingots from third parties as required, and particularly for use in our seamless steel pipe
facilities in Canada and the United States and to supplement production from our steel shop in Mexico.
In Canada, we mainly source our steel bars requirements from our integrated facilities in Argentina, Italy, Mexico,
Romania and United States.
In the United States, we own a steel shop facility in Koppel, Pennsylvania. After having completed certain
investments in 2021, this facility provides a significant portion of the steel bars required by our Bay City and
Ambridge mills. We also use steel bars imported from our integrated facilities in Romania, Italy, Argentina and
Mexico. These imports have been excluded from Section 232 tariffs, by application of certain commercial
agreements (between the U.S. and the EU, and between the U.S. and Mexico).Additionally, we have contracts in
place with Nucor Steel and U.S. Steel to purchase a portion of the steel bar requirements in our Bay City mill.
In Japan, following the termination of our joint venture and the closure of the NKKTubes plant, JFE agreed to
provide us with 13 Chrome alloy products for a two-year period, that was extended for an additional five year
period, while we advance with the investments required to produce such materials in the rest of our industrial
system. For further information on the termination of the NKKTubes joint venture, please refer to note 36
“Termination of NKKTubes joint venture” of our audited consolidated financial statements included in this annual
report.
Steel coils and plates
For the production of welded steel pipe products, we purchase steel coils and steel plates principally from
domestic producers for processing into welded steel pipes. We have welded pipe operations in Argentina, Brazil,
Canada, Colombia, Saudi Arabia and the United States.
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Annual Report 2023
Steel coil market prices in 2023 decreased 12%. As a reference, prices for hot rolled coils, HRC Midwest USA Mill,
published by CRU, averaged $991 per metric ton in 2023 and $1,128 per metric ton in 2022 in comparison to
$1,734 in 2021.
For our welded pipe operations in the United States, a significant part of our requirements for steel coils are
supplied by Nucor Steel which is our principal supplier in the United States. Nucor Steel has a steel coil
manufacturing facility in Hickman, Arkansas, near to our principal welded pipe facility in the United States. During
2023, Nucor Steel supplied steel coils under a long-term purchase agreement, which is due to expire at the end of
2024.
In Canada, we have restarted negotiations with the main local suppliers to reach long-term agreements for our
welded pipe operations. Among such suppliers are ArcelorMittal Dofasco, which has steel coil manufacturing
facilities in Hamilton, Ontario, and Algoma Steel, which has steel coil manufacturing facilities in Sault Ste. Marie,
Ontario.
We also purchase steel coils and plates for our welded pipe operations in South America (Colombia, Brazil and
Argentina). In Brazil, principally from Gerdau S.A., ArcelorMittal Tubarão and Usiminas, a subsidiary of Ternium.
In Argentina from Ternium Argentina S.A. (“Ternium Argentina”), a subsidiary of Ternium, and from Ternium’s
facilities in Mexico. In addition, in Brazil we also source plates and coils from international suppliers when not
produced domestically. In Saudi Arabia, we mainly purchase steel coils from the local market for SSPC and plates
from China for GPC.
Energy
We consume substantial quantities of electric energy, mainly at our electric steel shops in Argentina, Italy, Mexico,
Romania and the United States.
In Argentina, our local electric energy requirements are satisfied through purchases in the local market, by a 35-
megawatt thermo-electric power generating plant located within the Campana facility and since October 2023,
from our wind farm. In Dalmine, Italy, we have a 120-megawatt power generation facility which is designed to
have sufficient capacity to meet most of the electric power requirements of the operations. The additional energy
needed to cover the peaks of consumption and the excess energy produced are purchased and sold to the market
while heat is sold for district heating or used internally. In Mexico, our electric power requirements are mainly
satisfied by Techgen, a natural gas-fired combined cycle electric power plant in the Pesquería area of the State of
Nuevo León, while a small portion of our energy requirements are furnished by the Mexican government-owned
CFE. In the last few years, the Mexican government made various attempts to modify rules and regulations
governing the energy market in Mexico with potential impact on the energy supply and its cost. For more
information, see “Key Information – Risk Factors – Risks Relating to Our Business and Industry – Adverse economic
or political conditions in the countries where we operate or sell our products and services may decrease our sales
or disrupt our manufacturing operations, thereby adversely affecting our revenues, profitability and financial
condition”. In Romania and the United States, we source electric energy from the local market.
We consume substantial volumes of natural gas in Argentina, for the generation of DRI in addition to the
requirements for producing seamless pipes. Tecpetrol S.A. (“Tecpetrol”), a San Faustin subsidiary, is our main
natural gas supplier in Argentina under market conditions and according to local regulations.
We have transportation capacity agreements with Transportadora de Gas del Norte S.A. (“TGN”), a company in
which San Faustin holds a significant but non-controlling interest, corresponding to capacity of 1,000,000 cubic
meters per day until April 2027. In order to meet our transportation requirements for natural gas above volumes
contracted with TGN, we also have agreements with Naturgy S.A. (“Naturgy”), for a maximum transportation
capacity corresponding to approximately 970,000 cubic meters per day. For the final transportation phase, we
also have a supply contract with Naturgy. Both contracts with Naturgy are in place until April 2024 and are
expected to be renewed.
In addition to the amount of gas consumed at our Italian plants, we also require a substantial volume of natural
gas to feed our power generation facility in Italy. Our natural gas requirements for the power generation facility
are currently supplied by Edison Energia S.p.A while the natural gas consumed at our Italian plants is supplied by
Eni S.p.A.
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Annual Report 2023
Our costs for electric energy and natural gas vary from country to country. Prior to late 2021, energy costs
remained generally flat due to the increasing availability of natural gas from shale plays and additional renewable
energy generation at more competitive prices. In a context of uncertainty regarding future energy prices, in
December 2020, the Argentine government launched a new gas plan to increase natural gas supply following a
drop from the maximum levels reached in 2019. Because winter demand for natural gas continues to outpace
supply, Argentina is required to import natural gas from Bolivia and Chile and LNG from the international market
at high prices, in addition to using liquid fuel to generate electricity. In mid-2023, the Gasoducto Presidente
Nestor Kirchner was completed increasing the supply and improving costs through lower use of LNG and/or liquid
fuel. In late 2021, energy and gas prices increased, particularly in Europe. The Russian invasion of Ukraine led to
renewed volatility in energy commodity prices, accelerated by the low level of inventories throughout the first half
2022, reaching a peak in late August and then slowly stabilizing at high levels. In early 2023, European electricity
prices fell to pre-war levels, thanks to lower gas prices, mainly due to a particularly mild winter, and have
remained relatively stable throughout 2023. Due to milder temperatures, a decrease in demand for gas and the
activation of alternative energy, the filling of gas storage facilities in the EU countries remains high. See “Key
Information – Risk Factors – Risks Relating to Our Business and Industry – Increases in the cost of raw materials,
energy and other costs, limitations or disruptions to the supply of raw materials and energy; and price mismatches
between raw materials and our products may hurt our profitability”, “Key Information – Risk Factors – Risks
Relating to Our Business and Industry – Adverse economic or political conditions in the countries where we
operate or sell our products and services may decrease our sales or disrupt our manufacturing operations, thereby
adversely affecting our revenues, profitability and financial condition”, and for more information on the impact on
our business of the armed conflict in Ukraine, see “Key Information – Risk Factors – Risks Relating to Our Business
and Industry – An escalation of the Russia-Ukraine war and other armed conflicts may adversely affect our
operations”.
On November 1, 2023, the Company’s board of directors, approved an investment plan to build a second wind
farm in Argentina at a cost of approximately $214 million, which would supply a further 30% of the current
energy requirements of the facilities in Campana and reduce the CO2 emissions by a further 102,500 tons per
year. This investment is expected to be completed during 2025.
Ferroalloys
The purchase of ferroalloys is coordinated globally to ensure supply for each of our steel shops. International
prices of ferroalloys can vary substantially within a short period of time.
Prices for the main ferroalloys consumed by Tenaris increased sharply during the first half of 2022 (reaching the
highest levels since 2008). In the second half of 2022 prices suffered a sharp drop and continued decreasing
steadily during most of 2023.
The main drivers for the price peak seen in the first half of 2022 were the world’s economic recovery after the
COVID-19 pandemic, supporting increased steel production coupled with supply disruptions due to the Russia-
Ukraine conflict (as both are significant ferroalloy producers).
During the second half of 2022 global steel production slowed, especially in Europe as several mills shut down
their furnaces due to high energy costs and lower steel demand. In China, demand was also affected by the
country’s restrictive COVID-19 policies. As a result, ferroalloy prices decreased on lower demand. The further
decline in ferroalloys prices in 2023, was mainly related to the world’s economic instability, with high rates of
inflation and deceleration in GDP growth, putting pressure over global steel prices and steel mills curtailing
production due to tighter margins.
The demand for ferroalloys during 2023 was weak to the point some materials traded beneath the production
costs of many producers, forcing them to curtail production mainly in Europe and India. Lower material availability
and rising production costs such as electricity supported a rebound in ferroalloys’ prices from September levels to
the end of the year.
Molybdenum prices, however, remained strong and rose considerably in early 2023, mainly due to supply
shortages from many mining companies that are struggling with quality issues and labor shortages, the political
situation in Peru, as well as stronger demand from both the oil and gas industry and the automotive sector´s
continued production recovery as component shortages subside. Prices remained volatile throughout the rest of
the year with demand greatly exceeding supply.
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Annual Report 2023
Product Quality Standards
Our steel products (tubular products, accessories, coiled tubing, sucker rods and pipe coating) are manufactured
in accordance with the applicable specifications of the American Petroleum Institute (“API”), the American Society
for Testing and Materials (“ASTM”), the International Standardization Organization (“ISO”), and European
Standards (“EN”), among other standards. The products must also satisfy our proprietary standards as well as our
customers’ requirements. We maintain an extensive quality control and assurance program to guarantee that our
products and services consistently meet proprietary and industry standards bringing a high level of
competitiveness.
We currently maintain, for all our manufacturing facilities and service centers, a Quality Management System
(“QMS”) certified to ISO 9001 by Lloyd’s Register Quality Assurance and API product licenses granted by API,
which are requirements for selling to the major oil and gas companies and have rigorous quality standards.
Additionally, we have certified the QMS to API Q2 at certain locations, a certification specifically developed for
companies that offer services in the oil and gas industry.
All of our mills involved in the manufacturing of material for the automotive market are certified according to the
standard IATF 16949 by Lloyd’s Register Quality Assurance.
In addition, the majority of our testing laboratories are certified to ISO 17025. Our QMS, based on ISO 9001, API
Q1 and API Q2 specifications, as well as IATF 16049 when applicable, guarantees that products and services
comply with customer requirements from the acquisition of raw materials to the delivery of the final product and
services. The QMS is designed to ensure the reliability and improvement of the product and the manufacturing
operations processes as well as the associated services.
This year we updated our Quality, Health, Safety and Environment policy with the aim of reflecting excellence in
all Tenaris’s processes, products, and services with an aligned vision that quality is Tenaris’s main competitive
advantage.
Tenaris recently acquired Mattr’s pipe coating business including nine plants located in Canada, Mexico, Norway,
Indonesia, the United Arab Emirates and the United States, several mobile concrete plants, and world-class R&D
facilities in Canada and Norway, and a wide IP/product portfolio. Its ISO 9001 certified QMS is being integrated to
our QMS, a process to be completed by 2025.
Research and Development
R&D of new products and processes to meet the increasingly stringent requirements of our customers is an
important aspect of our business.
R&D activities are carried out primarily at our global R&D network managed and coordinated through its main
office in Amsterdam, the Netherlands and specialized research and testing facilities located in Campana,
Argentina, in Veracruz, Mexico and in Dalmine, Italy. Additionally, we have a Technology Center in Houston,
Texas, where we develop our TenarisHydril Wedge technology. Our R&D capabilities are expanded through the
engagement and collaboration with some of the world’s leading industrial research institutions to solve the
problems posed by the complexities of oil and gas, automotive and mechanical pipe projects with innovative
applications. In addition, our global Product Engineering and Technical Sales team is made up of experienced
engineers who work with our customers to identify solutions for each particular oil and gas drilling environment.
Product R&D currently being undertaken is focused on the challenging energy markets, which are lately
characterized by increasingly efficient oil and gas activities together with growing energy transition related
initiatives.
Product R&D includes:
•
•
•
proprietary Premium Joint products OCTG including Dopeless® technology;
proprietary steels for various applications (oil and gas drilling and transportation, hydrogen transportation
and storage, carbon dioxide transportation and injection, automotive, etc.);
heavy-wall deepwater line pipe, risers and welding technology;
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Annual Report 2023
•
•
•
•
•
•
•
•
tubes and components for the automotive industry and other mechanical applications;
large vessels for hydrogen storage and refueling stations;
tubes for boilers;
welded pipes for oil and gas and other applications;
sucker rods;
coiled tubing;
coatings; and
new low-carbon products and services for potentially fast-growing segments like hydrogen transportation
and storage, CCS and geothermal energy.
In addition to R&D aimed at new or improved products, we continuously study opportunities to optimize our
manufacturing processes. Recent projects in this area include hardware, algorithms and numerical modeling
applied to rolling, heat treatment, non-destructive testing and finishing processes and the development of
different process controls, with the goal of reducing energy consumption, reducing rejects, improving product
quality and productivity at our facilities.
We seek to protect our innovations and developments in products and processes through patents, trade secrets,
trademarks and other intellectual property tools that allow us to keep our competitiveness and differentiate
ourselves from our competitors.
We spent $60.0 million in R&D in 2023, compared to $50.7 million in 2022 and $45.3 million in 2021.
Capitalized costs were not material for the years 2023, 2022 and 2021.
Environmental, Social and Governance Regulation
We are subject to a wide range of local, provincial and national laws, regulations, permit requirements and
decrees relating to environmental, social and governance matters, including laws and regulations relating to
climate-change mitigation, use of resources, hazardous materials and radioactive materials, and air emissions,
water discharges and waste management; legislation on human rights and modern slavery; human capital,
including equal opportunity, gender and disabilities equality, working conditions, work-life balance, and labor
market access; and applicable rules on internal control and risk management, anti-corruption, business partner
relationship management and other governance issues. For more information on the Company’s governance
practices and applicable regulation, see “Directors, Senior Management and Employees” and “Corporate
Governance Statement – Corporate Governance”.
ESG regulation has been evolving over the past years and is expected to continue to evolve in the future,
particularly with respect to environmental matters. Laws and regulations protecting the environment have become
increasingly complex and more stringent and expensive to implement in recent years. Environmental requirements
vary from one jurisdiction to another adding complexity to the operations of global companies, such as Tenaris.
The Paris Agreement, adopted at the 2015 United Nations Climate Conference, sets out the global framework to
limit the rising temperature of the planet and to strengthen the countries’ ability to deal with the effects of
climate change. In order to achieve climate neutrality by the year 2050, the European Commission has laid out
several action plans, such as the EU climate adaptation strategy, sustainable finance policies and the raw materials
alliance. In addition, the EU Non-Financial Reporting Directive provides the legal framework for annual disclosure
of non-financial information and, the EU Taxonomy Regulation establishes a classification system for
environmentally sustainable economic activities, laying out definitions to businesses, stakeholders and
policymakers on which economic undertakings can be considered environmentally sustainable and requiring
companies to disclose, in the annual reports, how environmentally sustainable their economic activities are. More
recently, as part of the European Green Deal, the EU adopted CSRD, which requires European large companies
and listed issuers to disclose information on their risks and opportunities arising from social and environmental
issues, and on the impacts of their activities on people and the environment. In the case of Tenaris, the EU CSRD
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Annual Report 2023
will apply with respect to the Company’s 2024 annual report and will replace non-financial disclosure obligations
under the EU Non-Financial Reporting Directive.
Similarly, in response to an increasing investor focus and reliance on climate and ESG-related disclosure and
investment, the SEC announced in March 2021 the creation of a Climate and ESG Task Force to identify ESG-
related misconduct and potential violations, and in March 2022, the SEC released a proposal to amend its
disclosures rules on climate change matters. In March 2024, the SEC adopted the final rule on climate-related
disclosure, which will require registrants, including Tenaris from fiscal year 2025, to significantly expand the
climate-related disclosures in their periodic reports, including information about climate-related risks that are
reasonably likely to have a material impact on their business, results of operations, or financial condition, and
certain climate-related financial statement metrics in a note to their audited financial statements.
For more information on the impact of climate change legislations, increasing regulatory requirements and
significant technology and market changes, see “Key Information – Risk Factors – Risks Relating to Our Business
and Industry – Climate change legislation and increasing regulatory requirements aimed at transitioning to a
lower-carbon economy may reduce demand for our products and services and result in unexpected capital
expenditures and costs, and negatively affect our reputation”. For more information on the steps taken by Tenaris
to address climate change challenges, see “Operating and Financial Review and Prospects – Overview – Climate
Change”.
The ultimate impact of complying with ESG regulations, in particular with applicable environmental regulation, is
not always clearly known or determinable because certain laws and regulations have been evolving in the past
years or are under constant review by competent authorities. The expenditure required to comply with these laws
and regulations, including site or other remediation costs, or costs incurred from potential environmental
liabilities, could have a material adverse effect on our financial condition and profitability. While we incur, and will
continue to incur, expenditures to comply with applicable laws and regulations, there always remains a risk that
environmental incidents or accidents may occur that may negatively affect our reputation or our operations. For
more information on risks and costs related to compliance with environmental regulation and product liability, see
“Key Information – Risk Factors – Risks Relating to Our Business and Industry – The cost of complying with
environmental regulations and potential environmental and product liabilities may increase our operating costs
and negatively impact our business, financial condition, results of operations and prospects”.
Compliance with applicable ESG regulation is of utmost importance to Tenaris and a significant factor in our
industry and business. We have not been subject to any significant penalty for any material violation of applicable
ESG regulations, including for any material violation of environmental laws and regulations in 2023, 2022 and
2021 and we are not aware of any current material legal or administrative proceedings pending against us with
respect to ESG matters, which could have an adverse material impact on our financial condition or results of
operations.
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Annual Report 2023
Insurance
We carry property damage, general liability and certain other insurance coverage in line with industry practices.
However, we do not carry business interruption insurance. Our current general liability coverage includes third
party, employers, sudden and accidental seepage and pollution and product liability, up to a limit of $300 million.
Our current property insurance has an indemnification cap up to $250 million for direct damage, considering all
plants; and a deductible of $75 million.
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Annual Report 2023
Organizational Structure and Subsidiaries
We conduct all our operations through subsidiaries. The following table shows the principal subsidiaries of the
Company and its direct and indirect ownership in each subsidiary as of December 31, 2023, 2022 and 2021.
Company
ALGOMA TUBES INC.
Country of
Incorporation
Canada
BREDERO SHAW INTERNATIONAL B.V. and subsidiaries
Netherlands
CONFAB INDUSTRIAL S.A. and subsidiaries
DALMINE S.p.A. and subsidiaries
Brazil
Italy
EXIROS B.V. and subsidiaries (a)
Netherlands
HYDRIL COMPANY and subsidiaries
MAVERICK TUBE CORPORATION and subsidiaries
P.T. SEAMLESS PIPE INDONESIA JAYA
S.C. SILCOTUB S.A.
USA
USA
Indonesia
Romania
SAUDI STEEL PIPE CO. and subsidiaries (b)
Saudi Arabia
Main activity
Manufacturing of welded and
seamless steel pipes
Holding company and supplier of
pipe coating services
Manufacturing of welded steel
pipes
Manufacturing of seamless steel
pipes
Procurement and trading services
Manufacture and marketing of
premium connections
Manufacturing of welded and
seamless steel pipes
Manufacturing of seamless steel
products
Manufacturing of seamless steel
pipes
Manufacturing of welded steel
pipes
Manufacturing of welded steel
pipes
Manufacturing of seamless steel
pipes
Percentage of ownership
at December 31, (*)
2023
2022
2021
100% 100% 100%
100%
NA
NA
100% 100% 100%
100% 100% 100%
50%
50%
50%
100% 100% 100%
100% 100% 100%
89%
89%
89%
100% 100% 100%
48%
48%
48%
100% 100% 100%
100% 100% 100%
Argentina
Argentina
SIAT SOCIEDAD ANONIMA
SIDERCA SOCIEDAD ANONIMA INDUSTRIAL Y COMERCIAL
and subsidiaries (c)
TALTA - TRADING E MARKETING SOCIEDADE UNIPESSOAL
LDA.
TENARIS BAY CITY, INC.
TENARIS CONNECTIONS BV
TENARIS FINANCIAL SERVICES S.A.
TENARIS GLOBAL SERVICES (CANADA) INC.
TENARIS GLOBAL SERVICES (U.S.A.) CORPORATION
TENARIS GLOBAL SERVICES (UK) LTD
TENARIS GLOBAL SERVICES S.A. and subsidiaries
TENARIS INVESTMENTS (NL) B.V. and subsidiaries
TENARIS GLOBAL SERVICES and INVESTMENTS S.àr.l. and
subsidiaries
Portugal
Holding company
100% 100% 100%
USA
Netherlands
Uruguay
Canada
USA
United
Kingdom
Uruguay
Netherlands
Manufacturing of welded and
seamless steel pipes
Development, management and
licensing of intellectual property
Financial company
100% 100% 100%
100% 100% 100%
100% 100% 100%
Marketing of steel products
100% 100% 100%
Marketing of steel products
Holding company and marketing
of steel products
Holding company, marketing and
distribution of steel products
Holding company
100% 100% 100%
100% 100% 100%
100% 100% 100%
100% 100% 100%
Luxembourg
Holding company
100% 100% 100%
TENARIS QINGDAO STEEL PIPES LTD.
TENARIS TUBOCARIBE LTDA.
China
Colombia
TUBOS DE ACERO DE MEXICO, S.A. and subsidiaries
Mexico
Processing of premium joints,
couplings and automotive
components
Manufacturing of welded and
seamless steel pipes
Manufacturing of seamless steel
pipes
100% 100% 100%
100% 100% 100%
100% 100% 100%
(*) All percentages rounded.
Tenaris holds 40% of Tubular Technical Services Ltd. and Pipe Coaters Nigeria Ltd., 49% of Tubulars Finishing Nigeria Limited, 49%
of Amaja Tubular Services Limited, 60% of Tenaris Baogang Baotou Steel Pipes Ltd. Until 2022 held 98.4% of Tenaris Supply Chain
S.A. and, until 2021 held 49% of Tubular Services Angola Lda, after which years it started holding 100% of each of both companies.
(a) Tenaris holds 50% of the voting rights. The Company recognizes the assets, liabilities, revenue and expenses in relation to its
interest in the joint operation.
(b) Saudi Steel Pipe Co. is a public company listed in the Saudi Arabian Stock Exchange (Tadāwul), Tenaris holds 47.79% and has the
right to nominate the majority of the votes of the board of directors, therefore Tenaris has control over SSPC. Since May, 2023, Saudi
Steel Pipe Co. holds 57.3% of Global Pipe Company, therefore Tenaris has control over GPC.
(c) Until its liquidation in April 2023 Siderca held 51% of NKKTubes.
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Annual Report 2023
Other Investments
Ternium
We have a significant investment in Ternium, a Luxembourg company controlled by San Faustin, whose securities
are listed on the NYSE. As of December 31, 2023, the Company held 11.46% of Ternium’s share capital
(including treasury shares).
The Company is a party to a shareholders’ agreement with Techint Holdings S.àr.l. (“Techint Holdings”), a wholly
owned subsidiary of San Faustin and Ternium’s main shareholder, dated January 9, 2006, pursuant to which
Techint Holdings is required to take actions within its power to cause one of the members of Ternium’s board of
directors to be nominated by the Company and any directors nominated by the Company to be removed only
pursuant to previous written instructions from the Company. The Company and Techint Holdings also agreed to
cause any vacancies on Ternium’s board of directors to be filled with new directors nominated by either the
Company or Techint Holdings, as applicable. The shareholders’ agreement will remain in effect so long as each of
the parties holds at least 5% of the shares of Ternium or until it is terminated by either the Company or Techint
Holdings pursuant to its terms. Carlos Condorelli was nominated by the Company as a director of Ternium
pursuant to this shareholders’ agreement.
The following factors and circumstances evidence that Tenaris has significant influence over Ternium:
•
•
•
both the Company and Ternium are under the indirect common control of San Faustin;
four out of eight members of Ternium’s board of directors (including Ternium’s Chairman) are also members
of the Company’s board of directors;
the Company is entitled to nominate one director to Ternium’s board of directors pursuant to the shareholders’
agreement between the Company and Techint Holdings described above.
Usiminas
At December 31, 2023, Tenaris held, through its Brazilian subsidiary, Confab, 47.5 million ordinary shares and 1.3
million preferred shares of Usiminas, representing 6.76% of its shares with voting rights, 3.96% of its total share
capital, and 9.8% of Usiminas’ control group.
Confab’s participation in Usiminas share capital is the result of a series of acquisitions, the first of which was
completed on January 16, 2012, pursuant to which Ternium (through its subsidiaries Ternium Investments and
Ternium Argentina) and Confab acquired a large block of Usiminas ordinary shares and joined Usiminas’ existing
control group. Subsequently, in 2016, Ternium and Confab subscribed to additional ordinary shares and to
preferred shares.
More recently, on March 30, 2023, Confab, together with Ternium (through its subsidiaries Ternium Investments
and Ternium Argentina), acquired an additional 68.7 million ordinary shares of Usiminas, at a price of BRL10 per
ordinary share. The transaction closed on July 3, 2023, and was financed with cash on hand. Tenaris paid
approximately BRL110 million (approximately $22.7 million) in cash, for 11 million ordinary shares, increasing its
participation in the Usiminas control group to 9.8%.
The Usiminas control group comprises the T/T Group that is formed by Ternium Investments, Ternium Argentina
and Confab; the NSC Group, comprising NSC, Mitsubishi and MetalOne; and Usiminas’ employee pension fund,
Previdência Usiminas.
At December 31, 2023, the Usiminas control group held, in the aggregate, 483.6 million ordinary shares,
representing approximately 68.6% of Usiminas’ voting capital and the T/T Group held an aggregate participation
of 61.3% in the control group (with 51.5% of the Usiminas’ control group’s participation corresponding to
Ternium’s subsidiaries, and the remaining 9.8% corresponding to Confab); the NSC Group and Previdência
Usiminas held 31.7% and 7%, respectively, in Usiminas’ control group.
Upon closing of the July 3, 2023 acquisition, the then existing Usiminas shareholders agreement governing the
relationship between the T/T Group, the NSC Group and Previdência Usiminas was replaced by a new
shareholders agreement setting forth a new governance structure for Usiminas. The T/T Group is now entitled to
nominate a majority of the Usiminas board of directors, the chief executive officer and four other members of
Usiminas’ board of officers. Of the positions allocated to the T/T Group, Tenaris retains the right to nominate one
57
Annual Report 2023
member of Usiminas’ board of directors and one member of Usiminas’ board of officers. Ordinary decisions may
be approved with a 55% majority of Usiminas’ control group shares.
At any time after the second anniversary of the closing of the transaction, the T/T Group will have the right to buy
the NSC Group’s remaining interest in Usiminas’ control group (153.1 million ordinary shares) at the higher of
BRL10 per share and the 40-trading day average price per share immediately prior to the date of exercising the
option. In addition, the NSC Group has the right, at any time after the closing of the transaction, to withdraw its
remaining shares from Usiminas’ control group and sell them in the open market after giving the T/T Group the
opportunity to buy them at the 40-trading day average price per share, as well as the right, at any time after the
second anniversary of the closing, to sell such shares to the T/T Group at BRL10 per share. Confab will have the
right (but not the obligation) to participate in each such transaction pro rata to its current participation in the T/T
Group.
Confab and the Ternium entities party to the Usiminas shareholders agreement have a separate shareholders
agreement governing their respective rights and obligations as members of the T/T Group. Under such separate
agreement, Confab enjoys certain rights with respect to the governance of Usiminas, including, among others,
the ability to nominate certain of Usiminas’ officers and directors. These facts evidence that Tenaris continues to
have significant influence over Usiminas and, as a result, continues accounting for its investment under the equity
method.
Techgen
Techgen is a Mexican joint venture company owned 48% by Ternium, 30% by Tecpetrol and 22% by Tenaris.
Techgen operates a natural gas-fired combined cycle electric power plant in the Pesquería area of the State of
Nuevo León, Mexico. Tenaris, Ternium and Tecpetrol are parties to a shareholders’ agreement relating to the
governance of Techgen.
In the last few years, the Mexican government made various attempts to modify rules and regulations governing
the energy market in Mexico with potential impact on the energy supply and its cost. For more information on the
risks associated with the energy reform in Mexico, see “Key Information – Risk Factors – Risks Relating to Our
Business and Industry – Adverse economic or political conditions in the countries where we operate or sell our
products and services may decrease our sales or disrupt our manufacturing operations, thereby adversely affecting
our revenues, profitability and financial condition”.
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Annual Report 2023
Operating and Financial Review and Prospects
The following discussion and analysis of our financial condition and results of operations are based on, and should
be read in conjunction with, our audited consolidated financial statements and the related notes included
elsewhere in this annual report. This discussion and analysis present our financial condition and results of
operations on a consolidated basis. We prepare our consolidated financial statements in conformity with IFRS.
IFRS differ in certain significant respects from U.S. GAAP.
Certain information contained in this discussion and analysis and presented elsewhere in this annual report,
including information with respect to our plans and strategy for our business, includes forward-looking
statements that involve risks and uncertainties. See “Cautionary Statement Concerning Forward-Looking
Statements”. In evaluating this discussion and analysis, you should specifically consider the various risk factors
identified in “Key Information – Risk Factors”, other risk factors identified elsewhere in this annual report and
other factors that could cause results to differ materially from those expressed in such forward-looking
statements.
Overview
Our main source of revenue is the sale of products and services to the oil and gas industry, and the level of such
sales is sensitive to international oil and gas prices and their impact on drilling activities
Demand for our products and services from the global oil and gas industry, particularly for tubular products and
services used in drilling operations, represents a substantial majority of our total Tubes sales. Our sales, therefore,
depend on the condition of the oil and gas industry and our customers’ willingness to invest capital in oil and gas
exploration and production as well as in associated downstream processing activities. The level of these
expenditures is sensitive to oil and gas prices as well as the oil and gas industry’s view of such prices in the future.
Our business is highly competitive
The global market for steel pipes is highly competitive, with the primary competitive factors being price, quality,
service and technology. We sell our products in a large number of countries worldwide and compete primarily
against European and Japanese producers in most markets outside North America. In the United States and
Canada, we compete against a wide range of local and foreign producers. Over the past two decades, substantial
investments have been made, especially in China but also in other regions around the world, to increase
production capacity of seamless steel pipe products.
Our production costs are sensitive to prices of steelmaking raw materials and other steel products
We purchase substantial quantities of steelmaking raw materials, including ferrous steel scrap, DRI, pig iron, iron
ore and ferroalloys, for use in the production of our seamless pipe products. In addition, we purchase substantial
quantities of steel coils and plates for use in the production of our welded pipe products. Our production costs,
therefore, are sensitive to prices of steelmaking raw materials and certain steel products, which reflect supply and
demand factors in the global steel industry and in the countries where we have our manufacturing facilities.
Summary of results
In 2023, our net sales, EBITDA1 and net income reached record levels. The year was characterized by a first half, in
which prices in the Americas reached exceptional levels and we had a high level of pipeline shipments in
Argentina, and a second half, in which prices in the Americas started to return to more normal levels while overall
sales were supported by good activity and pricing levels in the Middle East and for offshore pipelines.
Operating margins expanded reflecting the higher prices realized on the sales of most of our products, which
more than compensated for higher costs of goods sold.
Net income benefited from a net positive deferred tax effect of $194 million as well as positive financial results of
$221 million.
Operating cash flow for the year amounted to $4,395 million (including a $182 million reduction in working
capital). After capital expenditures of $619 million, business acquisitions of $266 million, dividend payments of
1 EBITDA is a non-IFRS alternative performance measure—please see Exhibit 3 for more information on this measure.
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Annual Report 2023
$637 million and $214 million spent on share buybacks, our net cash position increased to a record level of $3.4
billion at the end of the year.
Climate change
Tenaris recognizes the profound challenges posed by climate change, both to society at large and to our business
specifically, considering the markets in which we engage, how government regulations may influence our
operations and those of our customers, and the geographical location of our physical assets (see “Key Information
– Risk Factors – Risks Relating to Our Business and Industry”). At the same time, climate change presents strategic
opportunities for us not only to strengthen our market leadership but also to explore new sales avenues.
Given the relevance of climate change for the Company’s overall business and strategy, our board of directors
quarterly reviews the progress of our climate change strategy and other relevant factors.
As part of our efforts to combat climate change, we are investing in and refining our operations to reduce their
carbon intensity. We are also developing products and services tailored for use in low-carbon energy applications.
We regularly assess and track global progress towards the energy transition, keeping an eye on policies,
regulations, technologies and other global and national developments that could speed up or hinder the progress
of this transition in the years to come, as well as other factors that could affect or pose particular risks to our
operations.
We recently conducted a climate risk assessment to better understand our most relevant industrial facilitiesʼ long-
term vulnerability to climate effects and physical climate risk, using the Intergovernmental Panel on Climate
Change (“IPCC”) high-emissions Representative Concentration Pathway (“RCP”) 8.5 global warming scenario
which showed no undue exposure for which Tenaris is unprepared.
We work closely with our customers to support their efforts to establish sustainable sourcing policies across their
supply chain, thus requiring a more detailed disclosure of climate change related impacts. We thus continue to
report to the Carbon Disclosure Project (“CDP”) and are using the Ecovadis and Open-es sustainability assessment
platforms, among others.
Our Sustainable Purchasing Policy is a framework supporting further action towards a more sustainable supply
chain, allowing us to encourage our suppliers to work in the same direction.
EAF producer
All the steel we manufacture is produced in electric arc furnaces using recycled steel scrap as the primary source
of metallic feedstock. We supplement the use of steel scrap with metallics such as pig iron, DRI and ferroalloys, to
meet quality, productivity and materials specifications. In Argentina, where steel scrap availability is limited, we
operate a facility to produce DRI using natural gas.
Steel produced in electric arc furnaces using a high proportion of scrap in the metallic charge generally has a
much lower carbon intensity than steel made using iron ore and metallurgical coal as primary feedstock.
We also purchase steel from third-party suppliers, primarily to manufacture welded pipe products. As many of
these suppliers make steel products using iron ore and coal, the carbon emissions intensity of the pipes made with
this steel is often far greater than that of those manufactured with our own steel.
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Annual Report 2023
Reducing the carbon intensity of our operations
In February 2021, we set a medium-term target to reduce the carbon emissions intensity of our operations by
30% by the year 2030, compared to a 2018 baseline, considering Scopes 1, 2 and 3 emissions for purchased raw
materials. Within Scope 3 emissions, the target considers emissions related to raw materials and steel purchased
from third parties, by far the most relevant source of our Scope 3 emissions. The GHGs included are CO2, CH4 and
N2O.
This medium-term target is a first step towards the broader objective of decarbonizing our operations and
reaching net zero carbon emissions. How long it will take to achieve this goal depends on the development of
emerging technologies as well as market and regulatory conditions, including carbon pricing and customer
support. We are allocating substantial resources to our decarbonization strategy and will continue to do so as this
will strengthen our competitive positioning.
We plan to reach our medium-term target mainly by:
•
•
•
increasing the use of recycled steel scrap (and reducing that of pig iron) in our raw material mix, without
compromising the quality of our products;
implementing energy efficiency measures, particularly as regards modernizing and revamping equipment and
furnaces; and
introducing and deploying renewable energy in our industrial system where the conditions for doing so are
competitive.
We also work closely with our value chain to identify opportunities for reducing carbon emissions. For instance,
we are looking into shortening the supply chain through our Rig Direct® service by synchronizing production
schedules and logistics for customer drilling operations. We are also studying alternative steelmaking materials,
such as biomass or residues to replace coal, or biogas to replace fossil fuels.
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Annual Report 2023
Our new Sustainability Sourcing Policy will help us to gain a better understanding of our suppliers’ real emissions
levels in order to identify further opportunities for improvement.
Much of the reduction in emissions intensity that we have made to date has been achieved by increasing the use
of recycled scrap and reducing pig iron in our metallic mix, thus reducing our Scope 3 emissions. Over the past
two years, however, Scope 3 emissions intensity has risen due to a rise in the proportion of welded steel pipe
(using steel purchased from third parties) in our production mix in order to meet the strong demand for pipeline
projects in Latin America and the Middle East. This increase in Scope 3 emissions related to purchased steel has
offset the reductions achieved in Scope 1 and Scope 2 emissions over the same period due to greater energy
efficiency and the use of renewables, as well as by further reducing the use of pig iron in our metallic mix.
CO2eq Emissions: Tubular production and processing sites
q
e
.
2
O
C
n
T
n
o
i
l
l
i
i
M
7
6
5
4
3
2
1
0
2.3
0.9
1.8
1.3
0.6
1.2
1.8
0.9
1.9
2.5
1.1
2.1
2.9
1.0
2.1
2019
2020
2021
2022
2023
Scope 3 Tn CO2-eq: upstream cat. 1 emissions
Scope 2 Tn CO2-eq: market based approach electricity emissions
Scope 1 Tn CO2-eq: direct emissions
Intensity Tn CO2 / Tn steel
l
e
e
t
s
n
T
/
q
e
.
2
O
C
n
T
1.5
1.0
0.5
0.0
CO2-eq emissions intensity (CO2-eq ton / ton steel cast or processed)
Scope 1
Scope 2
Scope 3
Total
2019
0.47
0.26
0.62
1.35
2020
0.48
0.26
0.60
1.33
2021
0.48
0.23
0.46
1.17
2022
0.43
0.23
0.52
1.18
2023
0.40
0.19
0.59
1.18
Intensity variation vs. 2018
(6%)
(6%)
(18%)
(17%)
(17%)
Over the past two years, we have substantially increased capital investment in projects aimed at contributing to
our decarbonization program and similar environmental goals. These investments amounted to 29% and 31% of
our total capital investments in 2022 and 2023, respectively. We expect to maintain similar investment levels for
related projects over the next few years.
Many of these investments are being made in developing renewable energy capacity for our operations. Following
an investment of approximately $200 million, in October 2023 we began operating our wind farm in Argentina,
with an installed capacity of 103.2 MW of power through the interconnected grid supplying nearly 50% of the
electricity used by our industrial facilities in Campana. This will reduce our CO2 emissions at Siderca by 152,000
tons per year, compared to 2018.
In November 2023, the Company’s board of directors approved a $214 million investment for a second wind farm
in Argentina after winning priority connection rights to the interconnected grid. This investment is expected to be
in 2025. Its output would meet another 30% of current energy needs at our Campana facilities, and reduce our
CO2 emissions by another 102,500 tons per year vs 2018 baseline. Both investments take into account the
exceptional wind conditions in Argentina. Other investments in renewable energy include rooftop solar panel
projects in China, Romania and Italy, while in Colombia, Romania and Mexico, we are buying power from
certified renewable sources. We continue to explore other options for renewables.
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Annual Report 2023
During 2023, 12% of the electricity we consumed was produced from renewables, taking into account own
generation and certified third-party purchases.
In 2023, the proportion of recycled scrap used as raw material in our steelmaking operations came to 79%, up
from 68% in 2018. The proportion of recycled scrap we can use at each facility depends on local availability, scrap
quality and the steel quality requirements of our products. Our operation in Argentina has been particularly
affected by the limited availability of local scrap.
We have increased our steel’s recycling content by reducing the amount of pig iron in the metallic mix. At our
Tamsa steel shop in Mexico, experts are working with data science models to design the optimum charge to
maximize scrap use while complying with steel quality standards and meeting other performance criteria.
We are also investing in projects to improve our scrap market sourcing ability, as well as scrap-handling and
storage capabilities.
As a company dedicated to industrial excellence, prioritizing energy efficiency has long been central to our
continuous improvement efforts as well as to our investment initiatives. Our aim is to modernize production lines
and equipment.
Ongoing projects include:
•
•
revamping a heat treatment furnace at our Dalmine mill in Italy, with hydrogen-ready burners using
hydrogen, natural gas or blends thereof; and
replacing one of our steel furnaces at our Siderca mill in Argentina with energy- efficient Consteel®
technology. This enables the continuous charging of raw materials which are preheated with fumes
produced during the melting process, and reduces electricity, natural gas and electrodes consumption
compared to traditional batch-charging technologies.
As we pursue our strategy of decarbonizing our operations, we are exploring various options with different
partners around the world. We know that there is no single solution, as certain alternatives are better suited to
specific sites or regions based on local infrastructure and resources.
Additionally, we have the support of our parent organization, the Techint Group, owner of Tenova, which
develops sustainable technologies for the metals industries, and Techenergy Ventures, a venture capital company
specialized in energy transition technology.
Internal carbon price and financial considerations
To speed up the achievement of our decarbonization targets and prepare for the potential adoption of additional
carbon pricing mechanisms around the world, in 2021, we introduced an internal carbon price of a minimum of
$80/ton. This internal carbon price is primarily used to evaluate investments in projects that could help to
decarbonize our operations.
We continuously track the strategies of our major customers and their projections for future energy demand. This
includes aligning with global goals to address climate change by reducing carbon emissions in accordance with
the Paris Agreement, as well as supporting national objectives for a carbon-neutral world.
We also assess the future market outlook for our products, taking into account different oil and gas demand
scenarios as published by our customers, international agencies like the International Energy Agency (“IEA”), and
energy market consultancies, such as Rystad Energy (“Rystad”).
We pay particular attention to historical records and the potential pace of change in the adoption of new
technologies, regulations and behaviors which could affect future oil and gas demand. We use these scenarios
and assessments as essential input to shape and assess our business strategy, and how we address the risks and
opportunities arising from climate change.
The transition from current reliance on fossil fuels, including oil and gas, to cleaner alternatives is uncertain, with a
wide range of potential outcomes. This transition is further complicated by the simultaneous expectation of an
overall increase in energy demand.
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Annual Report 2023
Tenaris takes these risks into consideration when evaluating its investments in major projects and the acquisition
of equipment to produce steel pipes, factoring them into the accounting estimates and assumptions used to
assess the carrying value of its assets.
Products for the energy transition
As suppliers of tubular products and services to the energy industry, the energy transition provides us with an
opportunity to develop new products and services for potentially fast-growing segments such as hydrogen
transportation and storage, CCS, and geothermal installations. Over the past three years, we have increased our
investments in R&D and sharpened our organizational focus in these areas, as they are expected to contribute a
highly relevant revenue stream to the company in the future.
We have developed a range of materials technologies and products that have been tested for use in hydrogen
storage and transportation, CCS injection wells, and geothermal applications. Regarding hydrogen storage and
transportation, we are seeing growth in demand for large, high-pressure vessels used in the build out of hydrogen
refueling stations for heavy-duty vehicles and buses. Initially in Europe and California, these stations are now
becoming more common. We have also observed increasing customer interest in developing geothermal, waste-
to-energy and CCS projects.
Outlook
In an environment where oil prices remain relatively stable, oil supply and demand are balanced, and the long term
outlook for natural gas, especially LNG, is promising, drilling activity in North America is stabilizing, while continuing
to increase in the Middle East and offshore. In this context, and considering our expanded perimeter, with our
recent acquisition of the Shawcor pipe coating business, we expect that, in the first half of 2024, our sales will be
in line with those of the second half of 2023.
After the exceptional levels they reached in the post-Covid recovery, tubular price levels and margins in the Americas
have returned to sustainable levels and should stabilize in the coming months. Prices and margins in the rest of the
world should remain at good levels supported by strong demand for offshore operations and pipeline projects.
In Latin America, fundamental conditions remain favorable for the continued expansion of drilling activity and
tubular demand, but the high level of political and economic volatility may affect these prospects.
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Annual Report 2023
Operating Results
The following discussion and analysis of our financial condition and results of operations is based on our audited
consolidated financial statements included elsewhere in this annual report. Accordingly, this discussion and
analysis present our financial condition and results of operations on a consolidated basis. See “Presentation of
Certain Financial and Other Information - Accounting Principles” and “II. Accounting Policies A. Basis of
presentation” and “B. Group accounting” to our audited consolidated financial statements included in this
annual report. The following discussion should be read in conjunction with our audited consolidated financial
statements and the related notes included in this annual report.
Thousands of U.S. dollars (except number of shares and
per share amounts)
For the year ended December 31,
2022
2021
2023
Selected consolidated income statement data
Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Impairment charge (1)
Other operating income (expenses), net
Operating income
Finance income
Finance cost
Other financial results
Income before equity in earnings of non-consolidated
companies and income tax
Equity in earnings of non-consolidated companies
Income before income tax
Income tax
Income for the year
Income attributable to (2):
Shareholders' equity
Non-controlling interests
Income for the year (2)
14,868,860
(8,668,915)
6,199,945
(1,919,307)
-
35,770
4,316,408
213,474
(106,862)
114,365
4,537,385
95,404
4,632,789
(674,956)
3,957,833
11,762,526
(7,087,739)
4,674,787
(1,634,575)
(76,725)
(212)
2,963,275
80,020
(45,940)
(40,120)
2,957,235
208,702
3,165,937
(617,236)
2,548,701
6,521,207
(4,611,602)
1,909,605
(1,206,569)
(57,075)
61,548
707,509
38,048
(23,677)
8,295
730,175
512,591
1,242,766
(189,448)
1,053,318
3,918,065
39,768
3,957,833
2,553,280
(4,579)
2,548,701
1,100,191
(46,873)
1,053,318
Depreciation and amortization
Weighted average number of shares (3)
Basic and diluted earnings per share
Dividends per share (4)
(548,510)
1,178,737,751
3.32
0.54
(607,723)
1,180,536,830
2.16
0.45
(594,721)
1,180,536,830
0.93
0.27
(1)
(2)
Impairment charge in 2022 represents a charge of $77 million to the carrying value of certain idle assets and in 2021 represents a charge
of $57 million to the carrying value of fixed assets of the CGU NKK.
IAS 1 (revised), requires that income for the year as shown on the income statement does not exclude non-controlling interests. Earnings
per share, however, continue to be calculated on the basis of income attributable solely to Shareholders’ equity.
(3) Weighted average number of shares does not include treasury shares.
(4) Dividends per share correspond to the dividends paid in respect of the year.
65
Annual Report 2023
Thousands of U.S. dollars (except number of shares)
2023
At December 31,
2022
2021
Selected consolidated financial position data
Current assets
Property, plant and equipment, net
Other non-current assets
Total assets
Current liabilities
Non-current borrowings
Deferred tax liabilities
Other non-current liabilities
Total liabilities
Shareholders' equity
Non-controlling interests
Total equity
Total liabilities and equity
Share capital
Number of issued shares (1)
(1) Number of issued shares includes treasury shares.
10,504,459
6,078,179
4,499,257
21,081,895
2,901,975
48,304
631,605
469,574
4,051,458
8,468,596
5,556,263
3,525,387
17,550,246
2,788,423
46,433
269,069
411,884
3,515,809
4,981,173
5,824,801
3,643,457
14,449,431
1,559,645
111,432
274,721
397,931
2,343,729
16,842,972
187,465
17,030,437
13,905,709
128,728
14,034,437
11,960,578
145,124
12,105,702
21,081,895
17,550,246
14,449,431
1,180,537
1,180,536,830
1,180,537
1,180,536,830
1,180,537
1,180,536,830
The following table sets forth our operating and other costs and expenses as a percentage of net sales for the
periods indicated.
Percentage of net sales
For the year ended December 31,
2022
2021
2023
Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Impairment charge
Other operating income (expenses), net
Operating income
Finance income
Finance cost
Other financial results
Income before equity in earnings of non-consolidated
companies and income tax
Equity in earnings of non-consolidated companies
Income before income tax
Income tax
Income for the year
Income attributable to:
Shareholders' equity
Non-controlling interests
100.0
(58.3)
41.7
(12.9)
-
0.2
29.0
1.4
(0.7)
0.8
30.5
0.6
31.2
(4.5)
26.6
26.4
0.3
100.0
(60.3)
39.7
(13.9)
(0.7)
(0.0)
25.2
0.7
(0.4)
(0.3)
25.1
1.8
26.9
(5.2)
21.7
21.7
(0.0)
100.0
(70.7)
29.3
(18.5)
(0.9)
0.9
10.8
0.6
(0.4)
0.1
11.2
7.9
19.1
(2.9)
16.2
16.9
(0.7)
66
Annual Report 2023
Fiscal Year Ended December 31, 2023, Compared to Fiscal Year Ended December 31, 2022
The following table shows our net sales by business segment for the periods indicated below:
Millions of U.S. dollars
Tubes
Others
Total
Tubes
For the year ended December 31,
2022
2023
14,185
684
14,869
95%
5%
100%
11,133
630
11,763
95%
5%
100%
Increase / (Decrease)
27%
9%
26%
The following table indicates, for our Tubes business segment, sales volumes of seamless and welded pipes for the
periods indicated below:
Thousands of tons
Seamless
Welded
Total
For the year ended December 31,
2023
2022
3,189
953
4,141
Increase / (Decrease)
3,146
387
3,533
1%
146%
17%
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:
Millions of U.S. dollars
For the year ended December 31,
Increase / (Decrease)
2023
2022
Net sales
- North America
- South America
- Europe
- Asia Pacific, Middle East & Africa
Total net sales
Operating income
Operating income (% of sales)
7,572
3,067
1,055
2,491
14,185
4,183
29.5%
6,796
2,213
867
1,257
11,133
2,867
25.8%
11%
39%
22%
98%
27%
46%
Net sales of tubular products and services increased 27% to $14,185 million in 2023, compared to $11,133
million in 2022, reflecting a 17% increase in volumes and a 9% increase in average selling prices. Volumes
increased mainly in the AMEA region following an increase in activity and in South America mainly due to the
delivery of welded line pipe for a gas pipeline in Argentina. Prices were higher in all regions.
Operating results from tubular products and services, amounted to a gain of $4,183 million in 2023, compared to
a gain of $2,867 million in 2022 (which was net of a $63 million impairment charge). The improvement in
operating results was driven by the recovery in shipment volumes and in prices which helped to compensate for
an increase in 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:
67
Annual Report 2023
Millions of U.S. dollars
Net sales
Operating income
Operating income (% of sales)
For the year ended December 31,
2023
2022
684
133
19.5%
Increase / (Decrease)
9%
39%
630
96
15.2%
Net sales of other products and services increased 9% from $630 million in 2022 to $684 million in 2023, which
includes $77 million from the pipe coating business unit acquired from Mattr on November 30, 2023.
Additionally, in 2023 we had higher sales from our oilfield services business in Argentina, sucker rods and coiled
tubing services, which offset the decline in sales of excess raw materials and energy and pipes for plumbing
applications in Italy.
Operating results from other products and services amounted to a gain of $133 million in 2023, compared to $96
million in 2022. Results were mainly derived from our sucker rods business and our oilfield services business in
Argentina.
Selling, general and administrative expenses, or SG&A, amounted to $1,919 million (12.9% of net sales) in 2023,
compared to $1,635 million (13.9%) in 2022. The 2023 increase in SG&A is mainly due to higher labor costs and
logistic costs (freights and taxes), although they decreased as a percentage of sales.
Financial results amounted to a gain of $221 million in 2023, compared to a loss of $6 million in 2022. 2023
results are mainly derived from net foreign exchange gains of $209 million, mainly related to the positive effect of
the devaluation of the ARS over a net short exposure in that currency. These positive FX results were partially
offset by a $95 million loss from the change in the fair value of U.S. dollar-denominated Argentine bonds when
distributed and disposed abroad. Additionally, our net cash position yielded a net interest gain of $107 million in
the year.
Equity in earnings of non-consolidated companies generated a gain of $95 million in 2023, compared to $209
million in 2022. These results were mainly derived from our equity investment in Ternium (NYSE:TX). The result of
2023 includes a non-cash loss of $144 million from our investment in Usiminas ($26 million from our direct
investment in Usiminas and $118 million from our indirect investment in Usiminas through Ternium), related to
the fair value measurement of the shares and the result of recycling Ternium´s negative accumulated currency
translation reserve to the income statement. In 2022, equity in earnings of non-consolidated companies included
a $34 million impairment charges on our participations in the joint venture with Severstal ($15 million) and in
Usiminas ($19 million).
Income tax charge amounted to $675 million in 2023, compared to $617 million in 2022, reflecting the
improvement in results in several subsidiaries and a net positive deferred tax effect of $194 million.
Fiscal Year Ended December 31, 2022, Compared to Fiscal Year Ended December 31, 2021
The following table shows our net sales by business segment for the periods indicated below:
Millions of U.S. dollars
Tubes
Others
Total
Tubes
For the year ended December 31,
2022
11,133
630
11,763
5,994
528
6,521
95%
5%
100%
2021
Increase / (Decrease)
92%
8%
100%
86%
19%
80%
The following table indicates, for our Tubes business segment, sales volumes of seamless and welded pipes for the
periods indicated below:
Thousands of tons
Seamless
Welded
Total
For the year ended December 31,
2021
2022
Increase / (Decrease)
3,146
387
3,533
68
2,514
289
2,803
25%
34%
26%
Annual Report 2023
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:
Millions of U.S. dollars
Net sales
- North America
- South America
- Europe
- Asia Pacific, Middle East & Africa
Total net sales
Operating income
Operating income (% of sales)
For the year ended December 31,
2021
2022
Increase / (Decrease)
6,796
2,213
867
1,257
11,133
2,867
25.8%
3,240
1,051
622
1,081
5,994
613
10.2%
110%
111%
39%
16%
86%
368%
Net sales of tubular products and services increased 86% to $11,133 million in 2022, compared to $5,994 million
in 2021, reflecting a 26% increase in volumes and a 47% 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 and in South America mainly due to higher OCTG sales in the region and deliveries for a
gas pipeline in Argentina.
Operating results from tubular products and services, amounted to a gain of $2,867 million in 2022, compared to
a gain of $613 million in 2021. Tubes operating income in 2022 is net of a $63 million impairment charge, while
in 2021 it includes an impairment charge of $57 million. The improvement in operating results was driven by the
recovery in shipment volumes and in prices and higher level of utilization of production capacity, which more than
offset an increase in 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:
Millions of U.S. dollars
Net sales
Operating income
Operating income (% of sales)
For the year ended December 31,
2021
2022
Increase / (Decrease)
630
96
15.2%
528
95
17.9%
19%
1%
Net sales of other products and services increased 19% from $528 million in 2021 to $630 million in 2022,
mainly due to higher sales of sucker rods, of our oilfield services business in Argentina which offers hydraulic
fracturing and coiled tubing services and excess raw materials, partially offset by lower sales from the
discontinued industrial equipment business in Brazil.
Operating results from other products and services, amounted to a gain of $96 million in 2022, similar to the $95
million gained in 2021. Results were mainly derived from our sucker rods business and our oilfield services
business in Argentina, partially offset by a $20 million loss related to our discontinued industrial equipment
business in Brazil. The operating income for other products and services in 2022 includes a $14 million
impairment charge.
Selling, general and administrative expenses, or SG&A, amounted to $1,635 million (13.9% of net sales) in 2022,
compared to $1,207 million (18.5%) in 2021. The 2022 increase in SG&A is mainly due to higher logistic costs,
while they decrease as a percentage of sales.
Impairment charge. In 2022, we recorded a $77 million impairment: $63 million in our Tubes segment and $14
million in our Others segment, while in 2021 we recorded a $57 million impairment in our Tubes segment, as a
result of the termination of the NKKTubes joint venture.
69
Annual Report 2023
Other operating results amounted to zero in 2022, compared to a gain of $62 million in 2021. Results in 2022
include a $78 million charge from the settlement with the U.S. SEC, a $71 million non-cash gain from the
reclassification to the income statement of NKKTubes’s cumulative foreign exchange adjustments belonging to
the shareholders due to the cease of its operations and an $18 million gain from the sale of land in Canada after
the relocation of the Prudential facility. The gain in 2021 was mainly due to a $36 million recognition of fiscal
credits in Brazil and the profit from the sale of assets.
Financial results amounted to a loss of $6 million in 2022, compared to a gain of $23 million in 2021. 2022
financial loss includes a loss of $10 million related to the change in fair value of certain financial instruments
obtained in an operation of settlement of trade receivables and a $30 million loss related to the transfer of
Argentine sovereign bonds paid as dividend from an Argentine subsidiary to its shareholders.
Equity in earnings of non-consolidated companies generated a gain of $209 million in 2022, compared to $513
million in 2021. These results were mainly derived from our equity investment in Ternium (NYSE:TX). In 2022,
equity in earnings of non-consolidated companies included a $34 million impairment charges on our
participations in the joint venture with Severstal ($15 million) and in Usiminas ($19 million).
Income tax charge amounted to $617 million in 2022, compared to $189 million in 2021, reflecting the
improvement in results in several subsidiaries.
Liquidity and Capital Resources
The following table provides certain information related to our cash generation and changes in our cash and cash
equivalents position for each of the last three years:
Millions of U.S. dollars
Net cash provided by operating activities
Net cash (used in) provided by investing activities
Net cash used in financing activities
Increase (decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of year (excluding overdrafts)
Effect of exchange rate changes
Increase (decrease) in cash and cash equivalents
Cash and cash equivalents at the end of year (excluding overdrafts)
Cash and cash equivalents at the end of year (excluding overdrafts)
Bank overdrafts
Other current investments
Non-current investments
Derivatives hedging borrowings and investments
Current borrowings
Non-current borrowings
Net cash at the end of the year
For the year ended December 31,
2021
2022
2023
4,395
(2,687)
(1,125)
584
1,091
(58)
584
1,617
1,617
21
1,970
398
-
(535)
(48)
3,422
1,167
(164)
(178)
825
318
(52)
825
1,091
1,091
0
438
114
6
(682)
(46)
921
119
268
(648)
(261)
585
(6)
(261)
318
318
0
398
313
2
(220)
(111)
700
Our financing strategy aims to maintain adequate financial resources and access to additional liquidity. During
2023, cash flow provided by operating activities amounted to $4,395 million (including a decrease in working
capital of $182 million), our capital expenditures amounted to $619 million, and we paid dividends amounting to
$637 million. At the end of the year, we had a net cash position2 of $3.4 billion, compared to $921 million at the
beginning of the year.
We believe that funds from operations, the availability of liquid financial assets and our access to external
borrowing through the financial markets will be sufficient to satisfy our working capital needs, to finance our
planned capital spending program as well as to service our debt in the future twelve months and to address short-
term changes in business conditions.
2 Net cash position is a non-IFRS alternative performance measure—please see Exhibit 3 for more information on this measure.
70
Annual Report 2023
We have a conservative approach to the management of our liquidity, which consists of (i) cash and cash
equivalents (cash in banks, liquidity funds and investments with a maturity of less than three months at the date
of purchase), and (ii) other investments (fixed income securities, time deposits, and fund investments).
As of December 31, 2023, liquid financial assets as a whole (comprising cash and cash equivalents and other
investments) were 19% of total assets compared to 9% at the end of 2022.
We hold investments primarily in liquidity funds and variable or fixed-rate securities from investment grade issuers.
We hold our cash and cash equivalents primarily in U.S. dollars and in major financial centers. As of December 31,
2023, and December 31, 2022, U.S. dollar denominated liquid assets represented 94% and 87% of total liquid
financial assets, respectively.
Fiscal Year Ended December 31, 2023, Compared to Fiscal Year Ended December 31, 2022
Operating activities
Net cash provided by operations during 2023 was $4,395 million, compared to $1,167 million during 2022. This
increase was mainly attributable to the working capital variation which amounted to a reduction of $182 million
in 2023, while in 2022 there was a working capital increase of $2,131 million. The annual variation in working
capital was mainly attributed to a decrease of $187 million in inventories and $154 million in trade receivables,
partially offset by a decrease of $149 million in trade payables and $102 million in customer advances, compared
to an increase of $1,330 million in inventories and $1,208 million in trade receivables in 2022. The increase in net
cash provided by operations is also due to better results, as net income amounted to $3,958 million in 2023,
compared to a net income of $2,549 million in 2022. For more information on cash flow disclosures and changes
to working capital, see note 30 “Cash flow disclosures” to our audited consolidated financial statements included
in this annual report.
Investing activities
Net cash used in investing activities was $2,687 million in 2023, compared to net cash used in investing activities
of $164 million in 2022. In 2023, we increased our financial investments by $1,857 million compared to a
decrease of $123 million in 2022, while capital expenditures amounted to $619 million in 2023 compared to
$378 million in 2022. In 2023, we paid $266 million in connection with acquisitions, compared to $4 million in
2022.
Financing activities
Net cash used in financing activities, including dividends paid, proceeds and repayments of borrowings and
acquisitions of non-controlling interests, was $1,125 million in 2023, compared to $178 million in 2022.
During 2023, we had net repayments of borrowings of $208 million while in 2022 we had net proceeds from
borrowings of $417 million.
Dividends paid during 2023 amounted to $637 million and during 2022 amounted to $531 million.
In 2023, we repurchased Company shares, under the existing share buyback program, for an amount of $214
million. There were no share repurchases during 2022.
Our total liabilities to total assets ratio was 0.19:1 as of December 31, 2023, and 0.20:1 as of December 31,
2022.
Fiscal Year Ended December 31, 2022, Compared to Fiscal Year Ended December 31, 2021
Operating activities
Net cash provided by operations during 2022 was $1,167 million, compared to $119 million during 2021. This
increase was mainly attributable to the better results during the year, as net income amounted to $2,549 million
in 2022 and $1,053 million in 2021, partially offset by a higher increase in working capital, which amounted to
$2,131 million in 2022, while in 2021 the increase in working capital amounted to $1,071 million. The annual
variation in working capital was mainly attributed to an increase of $1,330 million in inventories and $1,208 in
trade receivables, compared to an increase of $1,085 million in inventories and $356 million in trade receivables in
71
Annual Report 2023
2021. For more information on cash flow disclosures and changes to working capital, see note 30 “Cash flow
disclosures” to our audited consolidated financial statements included in this annual report.
Investing activities
Net cash used in investing activities was $164 million in 2022, compared to net cash provided by investing
activities of $268 million in 2021. In 2022, we decreased our financial investments by $123 million compared to a
decrease of $390 million in 2021, while capital expenditures amounted to $378 million in 2022 compared to
$240 in 2021.
Financing activities
Net cash used in financing activities, including dividends paid, proceeds and repayments of borrowings and
acquisitions of non-controlling interests, was $178 million in 2022, compared to $648 million in 2021.
During 2022, we had net proceeds from borrowings of $417 million while in 2021 we had net repayments of
borrowings of $277 million.
Dividends paid during 2022 amounted to $531 million and during 2021 amounted to $319 million.
Our total liabilities to total assets ratio was 0.20:1 as of December 31, 2022, and 0.16:1 as of December 31,
2021.
Principal Sources of Funding
During 2023, we funded our operations with operating cash flows, bank financing and available liquid financial
assets. Short-term bank borrowings were used as needed throughout the year.
Financial liabilities
During 2023, borrowings decreased by $145 million to $583 million at December 31, 2023, from $729 million at
December 31, 2022.
Borrowings consist mainly of bank loans. As of December 31, 2023, U.S. dollar-denominated borrowings plus
borrowings denominated in other currencies swapped to the U.S. dollar represented 60% of total borrowings.
For further information about our financial debt, please see note 21 “Borrowings” to our audited consolidated
financial statements included in this annual report.
The following table shows the composition of our financial debt at December 31, 2023, 2022 and 2021:
Millions of U.S. dollars
2023
2022
2021
Bank borrowings
Bank overdrafts
Total borrowings
562
21
583
729
0
729
331
0
331
Our weighted average interest rates before tax (considering hedge accounting) amounted to 10.56% at
December 31, 2023, and to 9.45% at December 31, 2022.
The maturity of our financial debt is as follows:
Millions of U.S. dollars
At December 31, 2023
Borrowings
Interest to be accrued
Total
1 year or less
1 - 2 years
2 - 3 years
Over 3 Years
Total
535
11
546
47
4
50
2
0
2
-
-
-
583
14
598
72
Annual Report 2023
Our current borrowings to total borrowings ratio amounted to 0.92:1 as of December 31, 2023, and to 0.94:1 as
of December 31, 2022. Our liquid financial assets exceeded our total borrowings, and we had a net cash position3
(cash and cash equivalents, other current and non-current investments, derivatives hedging borrowings and
investments, less total borrowings) of $3.4 billion at December 31, 2023, compared to $921 million at December
31, 2022.
As of December 31, 2023, lease liabilities amounted to approximately $134 million. The amount of remaining
payments with maturities of less than 1 year, between 2 and 5 years and more than 5 years was approximately
28%, 45% and 27%, respectively, of the total remaining payments.
As of December 31, 2022, lease liabilities amounted to approximately $112 million. The amount of remaining
payments with maturities of less than 1 year, between 2 and 5 years and more than 5 years was approximately
25%, 48% and 27%, respectively, of the total remaining payments.
For information on our derivative financial instruments, please see “Quantitative and Qualitative Disclosure about
Market Risk – Accounting for Derivative Financial Instruments and Hedging Activities” and note 26 “Derivative
financial instruments” to our audited consolidated financial statements included in this annual report.
For information regarding the extent to which borrowings are at fixed rates, please see “Quantitative and
Qualitative Disclosure About Market Risk”.
Significant Borrowings
Our most significant borrowings as of December 31, 2023 were as follows:
Millions of U.S. dollars
Disbursement date
2023
2023
2023
2017
Borrower
Type
Tubos de Acero de Mexico S.A. Bilateral
Bilateral
Tenaris Tubocaribe Ltda.
Bilateral
Confab Industrial S.A.
Bilateral
Global Pipe Company
Final maturity
2024
2024
2024
2024 / 2025
Outstanding
200
60
40
39
As of December 31, 2023, Tenaris was in compliance with all of its covenants, or obtained the necessary waivers
from the applicable financial institution if the covenants were not met.
Trend Information
Principal Factors Affecting Oil and Gas Prices and Demand for Steel Pipes from the Global Oil and Gas Industry
Sales to the oil and gas industry worldwide represent a high percentage of our total sales, and demand for steel
pipes from the global oil and gas industry is a significant factor affecting the general level of volumes and prices
for our products. Downward pressures on oil and gas prices usually result in lower oil and gas drilling activity and
investment throughout the oil and gas industry with consequently lower demand for our steel pipe products and,
in some circumstances, upward pressures can result in higher demand from our oil and gas customers.
Whereas oil prices are similar in most parts of the world because oil is a fully tradable commodity, gas prices are
influenced by regional factors. In North America, where gas production is extensively developed and there is an
extensive regional pipeline system, these factors include available gas storage capacity and seasonal weather
patterns, particularly winter temperatures in the United States. LNG prices have been traditionally established in
relation to international oil prices, particularly in the largest LNG markets in Asia. However, as the market for LNG
has become more global and the United States has become a major source of LNG, LNG prices are now being set
increasingly in relation to gas prices prevailing at regional gas hubs. In 2022, spot LNG prices completely
decoupled from oil prices as pipeline gas imports to Europe from Russia were substantially reduced consequent to
the Russian invasion of Ukraine and European countries dramatically increased imports of LNG to replace Russian
gas. LNG prices have since normalized and spot prices are currently below oil parity levels with high levels of gas
in storage in Europe and North America following a second consecutive relatively warm winter heating season.
3 Net cash position is a non-IFRS alternative performance measure—please see Exhibit 3 for more information on this measure.
73
Annual Report 2023
International oil prices depend on diverse factors. On the supply side, major oil-and-gas-producing nations and
companies have frequently collaborated to balance the supply (and thus the price) of oil in the international
markets. A major vehicle for this collaboration has been OPEC, and more recently what has become known as
OPEC+, which includes OPEC members, plus Russia and certain other countries. Many of our customers are state-
owned companies in member countries of OPEC and OPEC+. Another factor that has affected the international
price level of oil is the political and socioeconomic conditions of oil-producing countries, such as Libya, Nigeria and
Venezuela and the persistence of geo-political and armed conflicts, such as the recent Ukraine-Russia armed
conflict, and conflicts affecting the Middle East region, which is home to a substantial proportion of the world’s
known oil reserves. See “Key Information – Risk Factors – Risks Relating to Our Business and Industry – An
escalation of the Russia-Ukraine war and other armed conflicts may adversely affect our operations”.
On the demand side, economic conditions and the level of oil inventories have traditionally played a role in oil
prices and will continue to do so. Increasingly, however, the rate of substitution of oil and gas by alternative,
cleaner fuel sources such as renewables, as well as policies adopted by governments and financing entities
worldwide to accelerate the energy transition and by oil and gas companies to adapt their strategies to the energy
transition, will also play a significant role in oil prices.
Another factor affecting oil and gas prices has been the ability of producers in the United States and Canada to
rapidly increase production from their reserves of tight oil and shale gas in response to changes in market
conditions. Production from U.S. tight oil reserves has grown in recent years to represent over 10% of global
liquids production, and production from shale gas plays has converted the United States into a net exporter of
natural gas and a major player in the LNG market.
In 2020, the COVID-19 pandemic caused a sudden and precipitous drop in global oil demand and oil prices
collapsed even entering negative territory at one point. Since then, prices have recovered above their pre-
pandemic level with the recovery in demand and actions by OPEC member countries and other producers to cut
and then gradually increase production levels. In addition, energy and commodity prices spiked upwards at the
onset of the armed conflict involving Russia and Ukraine although they have subsequently fallen back to a large
extent. LNG prices, fell back at the end of 2022 and beginning of 2023 reflecting unusually warm winter weather
conditions and reduced industrial demand in Europe which resulted in far lower drawdowns from storage than is
customary for this period of the year. For more information on the impact of the armed conflict in Ukraine, see
“Key Information – Risk Factors – Risks Relating to Our Business and Industry – An escalation of the Russia-
Ukraine war and other armed conflicts may adversely affect our operations”.
The collapse of oil prices, in March 2020 took place when oil and gas operators, particularly in the United States,
were already reducing their investments and drilling activity in response to pressure from financial markets to
generate positive free cash flows4. Oil and gas operators around the world then made further substantial
reductions in their exploration and production investments, reducing them to a level around 70% of the pre-
pandemic level. Investments have subsequently recovered above their pre-pandemic level in 2023.
Since the development of the prolific Marcellus shale gas play, North American gas prices have remained at low
levels compared to previous decades and relative to other major gas-consuming regions and global LNG prices.
For several years, production increases, primarily from productive shale gas deposits, have exceeded regional
demand increases, reducing the need for imports, to the extent that, in 2017, the United States became a net
exporter of natural gas. Low prices have encouraged investment in gas consuming industrial facilities and LNG
export facilities as well as switching from coal to gas for electric power production, particularly with the adoption
of new regulations which could force the retirement of older coal-based generating units. With continuing
investments in LNG export facilities, the United States has become a major global LNG exporter, and, over the
past two years, has brought more new LNG capacity to the international market than any other producer.
Until the Russian invasion of Ukraine, LNG prices used to reflect supply and demand conditions in Asia, the major
LNG-consuming region, although demand had been increasing in regions like Europe, which imports LNG to
supplement its traditional pipeline imports from Russia and other neighboring gas-producing regions, and South
America, which imports LNG in its winter season and to supplement hydroelectric energy when rainfall is low. In
2022, however, Europe became a major competitor to Asia in the LNG market as it sought to replace Russian
pipeline gas at almost any cost. As Europe phases out imports of pipeline gas from Russia, demand for LNG in
Europe is likely to continue to grow in the coming years, and this is changing the price dynamics of the industry.
Demand, however, has been affected by higher temperatures and lower industrial activity in Europe over the past
4 Free cash flow is a non-IFRS alternative performance measure—please see Exhibit 3 for more information on this measure.
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Annual Report 2023
two winter heating seasons, and spot LNG prices have fallen back to levels below oil parity. Consumption, though
not necessarily prices, will continue to show seasonal fluctuations, increasing in the North Asian and European
winter period and declining in the summer months. The efforts to fill European storage capacity and increase
import capacity has, however, increased price volatility.
U.S. natural gas prices increased during 2021, reaching $6 per million BTU as LNG export capacity came on
stream and demand increased. In late 2022 and 2023, prices returned to a level of $2-3 per million BTU as LNG
export demand was capped by capacity limitations and the temporary shutdown of a facility while domestic
demand during the winter heating season was lower than usual. In early 2024, as U.S. winter heating demand
was affected by warmer than usual weather, prices fell below $2 per million BTU. At the same time, the Biden
administration paused the issuance of permits for new LNG export facilities.
Drilling activity in the United States and Canada, following several years of high activity, fell sharply through 2015
and the first half of 2016 before beginning a recovery which ended at the end of 2018. Drilling activity declined
throughout 2019 in response to a fall in oil prices at the end of 2018 and financial market pressures to produce
positive cash flow returns. This decline turned into a collapse with the onset of the COVID-19 pandemic in 2020.
Since then, there has been a steady recovery through 2021 and 2022. Production levels today are higher than
before the 2014 collapse of oil prices but rig counts are much lower, reflecting the strong productivity gains made
by the U.S. oil and gas drilling industry. In the rest of the world, drilling activity began to decline in the second half
of 2014, continued to decline during 2015, 2016 and 2017 before a gradual recovery in the second half of 2018
and 2019. Following the onset of the COVID-19 pandemic in 2020, drilling activity in the Eastern Hemisphere
declined more slowly and later than in Latin America but then recovered later and more gradually than in Latin
America.
Prior to the 2014 downturn in oil prices, a growing proportion of exploration and production spending by oil and
gas companies had been directed at offshore, deep drilling and non-conventional drilling operations in which
high-value tubular products, including special steel grades and premium connections, are usually specified. The
success, however, of shale drilling operators, with their inherently short investment cycles, in adapting to lower oil
and gas prices and increasing production, led to a slowdown in new developments of complex offshore projects
with long investment lead times in a context of low and more volatile oil prices, consequently affecting the level
of product differentiation. More recently, however, offshore drilling activity has increased again as exploration has
continued and cost-competitive developments, like those in Brazil, Guyana, and sub-Saharan Africa, are being
sanctioned and developed.
In addition, the increasing cost competitiveness and use of alternative renewable sources of energy will limit
growth in demand for oil and gas and put downward pressure on oil and gas prices in the longer term. This trend
will accelerate if carbon taxes or carbon pricing instruments resulting in high prices for carbon emissions, or other
regulations aimed at reducing the use of fossil fuels, are implemented around the world. There has been a
substantial increase in the number of commitments to reduce carbon emissions from governments and public
companies, including those operating in the oil and gas industry, and increased calls on governments and
financial entities to introduce regulations and policies to accelerate the energy transition away from fossil fuels to
cleaner sources of energy. Major oil and gas companies have been adapting their strategies to address the energy
transition and some are even setting out commitments to reduce production as early as 2030. For more
information on climate change regulations, see “Key Information – Risk Factors – Risks Relating to Our Business
and Industry - Climate change legislation and increasing regulatory requirements aimed at transitioning to a
lower-carbon economy may reduce demand for our products and services and result in unexpected capital
expenditures and costs, and negatively affect our reputation”.
On the other hand, we expect that the energy transition will create new markets for the use of our products and
services including in the transportation and storage of hydrogen and for CCS systems. We constantly monitor the
evolution of the strategies of our main customers and scenarios for future energy demand, considering the global
objectives for addressing climate change through the reduction of carbon emissions in accordance with the Paris
Agreement and national objectives to achieve carbon-neutrality. We also assess the market outlook for our
products with reference to the different scenarios for oil and gas demand published by our customers,
international agencies such as the IEA and expert energy market consultancies such as Rystad. These assessments
are used as fundamental input for evaluating our business strategy and how to address the risks and
opportunities arising from climate change.
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Annual Report 2023
The tables below show the annual average number of active oil and gas drilling rigs, or rig count, in the United
States, Canada, Latin America and Eastern Hemisphere (worldwide other than the United States, Canada and
Latin America, excluding Iran, Sudan, onshore China, Russia and Syria) and Worldwide, as published by Baker
Hughes, for the years indicated and the percentage increase or decrease over the previous year. Baker Hughes, a
leading oil service company, has published its rig counts on a monthly basis since 1975 as a general indicator of
activity in the oil and gas sector.
Rig count
2023
2022
2021
2020
Latin America
Other International (*)
Canada
United States
Worldwide
__________
(*) Excludes Iran, Sudan, onshore China, Russia and Syria (discontinued in February 2013).
178
769
177
687
1,811
168
683
175
723
1,749
137
618
132
478
1,365
107
718
89
433
1,347
Percentage increase (decrease) over the previous year
Latin America
Other International (*)
Canada
United States
Worldwide
__________
(*) Excludes Iran, Sudan, onshore China, Russia and Syria (discontinued in February 2013).
6%
13%
1%
(5%)
4%
23%
11%
33%
51%
28%
28%
(14%)
48%
10%
1%
2023
2022
2021
Critical Accounting Estimates
This discussion and analysis of our financial condition and results of operations is based on our audited
consolidated financial statements, which have been prepared in accordance with IFRS. IFRS differs in certain
significant aspects from U.S. GAAP.
The preparation of our audited consolidated financial statements and related disclosures in conformity with IFRS
requires us to make estimates and assumptions that might affect the reported amounts of assets and liabilities,
the disclosure of contingent liabilities and the reported amounts of revenue and expenses. Management evaluates
its accounting estimates and assumptions, including those related to impairment of goodwill and long-lived
assets; impairment in investment in associates; income taxes including recoverability of deferred tax assets;
obsolescence of inventory; contingencies; allowance for trade receivables; post-employment and other long-term
benefits; business combinations; useful lives of property, plant and equipment and other long-lived assets and
property title ownership restriction, and revises them when appropriate. Management bases its estimates on
historical experience and on various other assumptions it believes to be reasonable under the circumstances.
These estimates form the basis for making judgments about the carrying values of assets and liabilities that are
not readily apparent from other sources. Although management believes that these estimates and assumptions
are reasonable, they are based upon information available at the time they are made. Actual results may differ
significantly from these estimates under different assumptions or conditions. For more information, see “II.
Accounting Policies” to our consolidated financial statements included in this annual report.
Functional and presentation currency
The functional and presentation currency of the Company is the U.S. dollar. The U.S. dollar is the currency that
best reflects the economic substance of the underlying events and circumstances relevant to Tenaris’s global
operations.
Starting January 1, 2023, the Company changed the functional currency of its Brazilian subsidiaries, from the
Brazilian Real to the U.S. dollar.
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Annual Report 2023
This decision was a result of a significant increase of our Brazilian subsidiaries’ participation in the OCTG and line
pipe international markets, a trend which started in recent years and has been strengthened in 2022, an increased
level of integration of the local operations within Tenaris’s international commercial and supply chain system, as
well as the fact that the main purchase agreement contracts and the long term sales agreement contracts with
major international and local oil companies are either entered or indexed to the U.S. dollar. Local steel prices are
also being affected by the U.S. dollar / Brazilian Real fluctuations.
Except for its Italian subsidiaries whose functional currency is the Euro and two recently acquired subsidiaries whose
functional currencies are the Canadian Dollar and the Norwegian Krone, Tenaris determined that the functional
currency of its other subsidiaries is the U.S. dollar, based on the following principal considerations:
•
•
•
•
•
•
sales are mainly negotiated, denominated and settled in U.S. dollars. If priced in a currency other than the
U.S. dollar, the sales price may consider exposure to fluctuation in the exchange rate versus the U.S. dollar;
prices of critical raw materials and inputs are priced and settled in U.S. dollars;
transaction and operational environment and the cash flow of these operations have the U.S. dollars as
reference currency;
significant level of integration of local operations within Tenaris’s international global distribution network;
net financial assets and liabilities are mainly received and maintained in U.S. dollars; and
the exchange rate of certain legal currencies has long been affected by recurring and severe economic
crises.
Results of operations for subsidiaries whose functional currencies are not the U.S. dollar are translated into U.S.
dollars at the average exchange rates for each quarter of the year. Financial statement positions are translated at
the year-end exchange rates. Translation differences are recognized in a separate component of equity as
currency translation adjustments. In the case of a sale or other disposal of any of such subsidiaries, any
accumulated translation difference would be recognized in the consolidated income statement as a gain or loss
from the sale or disposal.
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Annual Report 2023
Directors, Senior Management and Employees
Directors and Senior Management
Board of Directors
Management of the Company is vested in a board of directors with the broadest power to act on behalf of the
Company and accomplish or authorize all acts and transactions of management and disposal that are within its
corporate purpose and not specifically reserved in the articles of association or by applicable law to the general
shareholders’ meeting. The Company’s articles of association provide for a board of directors consisting of a
minimum of three and a maximum of fifteen directors; however, for as long as the Company’s shares are listed on
at least one regulated market, the minimum number of directors must be five. The Company’s current board of
directors is composed of ten directors.
The board of directors is required to meet as often as required by the interests of the Company and at least four
times per year. Board of directors’ meetings can be validly held by means of teleconference call, video conference
or any other means genuinely allowing for the participation, interaction and intercommunication of the attending
directors. Written decisions, signed by all the directors, are proper and valid as though they had been taken at a
meeting of the board of directors duly convened and held. In 2023, the Company’s board of directors met seven
times and adopted one unanimous written resolution. A majority of the members of the board of directors in
office present or represented at the board of directors’ meeting constitutes a quorum, and resolutions may be
adopted by the vote of a majority of the directors present or represented. In case of a tie, the chairman is entitled
to cast the deciding vote.
Directors are elected at the annual ordinary general shareholders’ meeting to serve one-year renewable terms, as
determined by the general shareholders’ meeting. The general shareholders’ meeting also determines the number
of directors that will constitute the board and their compensation. The general shareholders’ meeting may dismiss
all or any one member of the board of directors at any time, with or without cause, by resolution passed by a
simple majority vote, irrespective of the number of shares represented at the meeting.
The Company’s articles of association provide that the board of directors of the Company may within the limits of
applicable law, (a) delegate to one or more persons, whether or not members of the board of directors, the
powers necessary to carry out its decisions and to provide day-to-day management (except for approval of
material transactions with related parties, which may not be delegated and shall be approved by the board of
directors prior opinion of the audit committee), (b) confer to one or more persons, whether or not members of
the board of directors the powers deemed to be appropriate for the general technical, administrative and
commercial management of the Company, (c) constitute an audit committee formed by directors, determining its
function and authority, and (d) constitute any other committee, whose members may or may not be members of
the board of directors and determine their functions and authority. On May 3, 2023, the board of directors
appointed Tenaris’s chief executive officer as administrateur délégué and delegated to him the power to manage
the Company’s affairs within the ordinary course of business, to the full extent permitted by Luxembourg law, to
direct and supervise the business activities of the Company’s subsidiaries and to represent the Company in
relation to such matters.
On May 3, 2023, the Company’s annual general shareholders’ meeting re-appointed Mr. Simon Ayat, Mr.
Roberto Bonatti, Mr. Carlos Condorelli, Mr. Germán Curá, Ms. Maria Novales-Flamarique, Mr. Gianfelice Mario
Rocca, Mr. Paolo Rocca, Mr. Jaime José Serra Puche, Ms. Monica Tiuba and Mr. Guillermo Vogel as members of
its board of directors, each board member to serve until the next annual shareholders’ meeting that will be
convened to decide on the Company’s 2023 annual accounts. The board of directors subsequently reappointed
Paolo Rocca as board chairman and Tenaris’s chief executive officer and Guillermo Vogel and Germán Curá as vice
chairmen of the board.
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Annual Report 2023
The following table sets forth the name of the Company’s current directors, their respective positions on the
board of directors, their principal occupation, their years of service as board members and their age.
Name
Position
Principal Occupation
Mr. Simon Ayat
Mr. Roberto Bonatti (1)
Mr. Carlos Condorelli
Mr. Germán Curá
Director
Director
Director
Director
Director of the Company
Director of San Faustin
Director of the Company and Ternium
Director and Vice Chairman of the Company's board
of directors
Strategy Advisor
Chairman of the board of directors of San Faustin
Mrs. Maria Novales-Flamarique Director
Mr. Gianfelice Mario Rocca (1)
Director
Mr. Paolo Rocca (1)
Director / CEO Chairman of the Company's board of directors and
Mr. Jaime José Serra Puche
Ms. Monica Tiuba
Mr. Guillermo Vogel
Director
Director
Director
Tenaris's chief executive officer
Chairman of S.A.I. Derecho & Economía
Director of the Company and chairperson of the
Company's audit committee
Director and Vice Chairman of the Company's board
of directors
Years as
Board
Member
Age at
December
31, 2023
4
21
17
6
2
21
22
21
6
21
69
74
72
61
47
75
71
72
45
73
(1) Paolo Rocca and Gianfelice Mario Rocca are brothers, and Roberto Bonatti is Paolo and Gianfelice Mario Rocca’s first cousin.
Simon Ayat. Mr. Ayat is a member of the Company’s board of directors and of its audit committee. He served as
Schlumberger’s executive vice president and chief financial officer from 2007 until early 2020 and as senior
strategic advisor to the chief executive officer of Schlumberger until January 2022. Mr. Ayat has held several
financial and operational positions in Schlumberger, where he commenced his career in 1982. He was based in
Paris, Houston and Dallas, as well as in the Middle East and Far East regions, serving as group treasurer, controller,
geomarket manager for Indonesia and drilling regional vice president for Asia Pacific. Mr. Ayat is also a member
of the board of directors of Liberty Energy, a leading provider of hydraulic fracturing and wireline services to E&P
companies in North America. He is a French and Lebanese citizen.
Roberto Bonatti. Mr. Bonatti is a member of the Company’s board of directors. He is a grandson of Agostino
Rocca, founder of the Techint Group, a group of companies controlled by San Faustin. Throughout his career in
the Techint Group he has been involved specifically in the engineering and construction and corporate sectors. He
was first employed by the Techint Group in 1976, as deputy resident engineer in Venezuela. In 1984, he became
a director of San Faustin, and from 2001 until 2020 he has served as its president. He is also a member of the
board of directors of Ternium. Mr. Bonatti is an Italian citizen.
Carlos Condorelli. Mr. Condorelli is a member of the Company’s board of directors. He served as the Company’s
chief financial officer from October 2002 until September 2007. He is also a board member of Ternium. He has
held several positions within Tenaris, including also the chief financial officer position in some of the principal
Tenaris Group companies and member of the Company’s audit committee between November 1, 2017 and May
2, 2018. He also served as president of the board of directors of Empresa Distribuidora La Plata S.A., an Argentine
utilities company. Mr. Condorelli is an Argentine citizen.
Germán Curá. Mr. Curá is a member of the Company’s board of directors and also holds the position of Vice
Chairman of the Company’s board of directors. He served as president of our operations in North America until
May 2, 2018, a position held since 2006. He was first employed by Siderca in 1988. Previously, he served as
Siderca’s exports director, Tamsa’s exports director and commercial director, sales and marketing manager of our
Middle East subsidiary, president of Algoma Tubes, president and chief executive officer of Maverick Tubulars and
president and chief executive officer of Hydril, director of our Oilfield Services global business unit and Tenaris
commercial director. He was also a member of the board of directors of API and of the American Iron and Steel
Institute (“AISI”). He is a marine engineer from the Instituto Tecnológico de Buenos Aires and an MBA graduated
from the Massachusetts Institute of Technology. Mr. Curá is an U.S. citizen.
Maria Novales-Flamarique. Ms. Novales-Flamarique is a member of the Company’s board of directors. She advises
multinational institutions on a variety of strategic and transformational issues. Previously, she was country head
for Generation Mexico, an NGO founded by McKinsey & Company that transforms education-to-employment
systems to prepare, place, and support people into life-changing careers that would otherwise be inaccessible.
She was also a partner at McKinsey & Company, leading more than 50 teams advising companies in Mexico,
other Latin American countries, the United States and Europe. She began her career in asset management at
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Annual Report 2023
Letko, Brosseau & Associates in Montreal, Canada, and worked as an investment banker at Citigroup Global
Markets in New York City. She currently serves as an independent director at Scotiabank Mexico, where she is a
member of the Audit and Talent committees. She also sits on advisory boards at several fintech, HRtech,
insurtech start-ups and venture capital funds. She holds an MBA from London Business School, a B.A. from HEC
Montreal and is a CFA Charterholder. Ms. Novales-Flamarique is a Canadian, Spanish, and U.S. citizen.
Gianfelice Mario Rocca. Mr. Rocca is a member of the Company’s board of directors. He is a grandson of
Agostino Rocca. He is chairman of the board of directors of San Faustin, member of the board of directors of
Ternium, president of the Humanitas Group and president of the board of directors of Tenova. Moreover, in Italy,
he is member of the board of Bocconi University and of the advisory board of Politecnico di Milano. At
international level, he is member of the Harvard Business School Advisory Board and member of the European
Round Table of Industrialists (“ERT”). Mr. Rocca is an Italian citizen.
Paolo Rocca. Mr. Rocca is the Chairman of the Company’s board of directors and has been our chief executive
officer since 2002. He is a grandson of Agostino Rocca. He is also the chairman of the board of directors of
Ternium and a director and President of San Faustin. He is a member of the executive committee of the World
Steel Association. Mr. Rocca is an Italian citizen.
Jaime José Serra Puche. Mr. Serra Puche is a member of the Company’s board of directors and of its audit
committee. He is the chairman of SAI Derecho & Economia, a Mexican consulting firm, and a member of the
board of directors of Grupo Vitro, and chairman of the board of BBVA. Mr. Serra Puche served as Mexico’s
Undersecretary of Revenue, Secretary of Trade and Industry, and Secretary of Finance. He led the negotiation and
implementation of NAFTA. Mr. Serra Puche is a Mexican citizen.
Monica Tiuba. Ms. Tiuba is a member of the Company’s board of directors and chairperson of the audit
committee. She is a Brazilian qualified lawyer and accountant with more than 20 years of professional experience
in Brazil and Luxembourg. She started her career at Barbosa, Mussnich & Aragão law firm in Rio de Janeiro, Brazil,
where she practiced corporate law, M&A and tax litigation. She worked in EY and PwC, in the Brazil and
Luxembourg offices, advising multinational clients, private equity houses and family offices. She gained banking
experience working as international senior wealth planner at Banque Edmond de Rothschild, in Luxembourg. She
currently serves as member of the board of directors of Investing for Development SICAV, a Luxembourg social
impact fund and of its Forest and Climate Change Fund and she was also a member of Freyr Battery’s board of
directors and chairperson of the audit and risk committee. She holds a Master of Laws in International and
Comparative Law at the Vrije Universiteit Brussel, a specialization in EU tax law from Leiden University and a
Master of Laws in international taxation from Vienna University of Economics. Ms. Tiuba is a Brazilian and
Luxembourgish citizen.
Guillermo Vogel. Mr. Vogel is a member of the Company’s board of directors and also holds the position of vice
chairman of the board. He is a notable Mexican businessperson with an extensive career in various industries. He
graduated from the Universidad Nacional Autónoma de México and also holds an MBA from the University of
Texas at Austin. Mr. Vogel has held prominent positions in several companies, showcasing his expertise and
leadership skills. He is the Chairman of GCollado S.A.B. de C.V. and Exportaciones IM Promoción, S.A. de C.V. His
influence extends to multiple organizations, as he has served as president of Canacero, the Steel Chamber in
Mexico, and as Vice Chairman of the American Iron and Steel Institute (“AISI”). Moreover, Mr. Vogel is actively
involved in various other companies and institutions. He is a board member of Techint, S.A. de C.V., Alfa S.A.B.
de C.V., Banco Santander (México) S.A; Innovare R&D, S.A., Europea Network Business Solutions S.A. de C.V;
Club de Industriales, A.C., Consejo Coordinador Empresarial; and several other organizations. His roles also
include contributions to the academic sector, as he is a member of the board of the Universidad Panamericana
and IPADE, A.C. His international presence is marked by his membership in The Trilateral Commission and the
International Board of The Manhattan School of Music. He also plays a key role in the US-Mexico CEO Dialogue as
its Chairman. Vogel's career reflects a blend of leadership in business and contributions to international relations
and education. Mr. Vogel is a Mexican citizen.
At the next annual general shareholders’ meeting scheduled to be held on April 30, 2024, it will be proposed that
the number of directors be increased to eleven, that all of the current members of the board of directors be
reappointed, and that Ms. Molly Montgomery be newly appointed to the board of directors, each to hold office
until the next annual general shareholders’ meeting that will be convened to decide on the Company’s 2024
annual accounts. Below is Ms. Montgomery’s biographical information.
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Annual Report 2023
Molly Montgomery. Ms. Montgomery has 20 years of experience advising senior executives and government
officials on geopolitical and policy issues. She currently serves as a Public Policy Director at Meta Platforms, Inc. In
her 15-year career in the U.S. government, her roles included serving in the White House as Special Advisor to the
Vice President for Europe and Eurasia and as the Deputy Assistant Secretary of State for the EU and Western
Europe. Ms. Montgomery was previously a senior vice president at Albright Stonebridge Group, where she
advised Fortune 500 clients on geopolitical risk, regulatory issues, and market entry and exit. She currently serves
as a member of the board of directors of the Center for European Policy Analysis and on the Leadership Council
for Women in National Security. She holds a BA in History and Political Science from Stanford University, an MPA
in International Relations from Princeton University, and a life membership in the Council on Foreign Relations.
Ms. Montgomery is a U.S. citizen.
Board members Ayat, Novales-Flamarique, Serra Puche and Tiuba qualify as independent directors under
Exchange Act Rule 10A-3(b)(1) and the Company’s articles of association. If appointed by the next annual general
meeting of shareholders, Ms. Montgomery would also qualify as an independent director for purposes of
Exchange Act Rule 10A-3(b)(1) and under the Company’s articles of association.
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Annual Report 2023
Directors’ Liability
Each director must act in the interest of the Company, and in accordance with applicable laws, regulations, and
the Company’s articles of association. Directors are also bound by a general duty of care owed to the Company.
Under the Luxembourg law of August 10, 1915, on commercial companies, as amended (the “Luxembourg
Company Law”), directors may be liable to the Company in accordance with general law for the execution of
their mandate and for any misconduct in the management of the Company’s affairs. Directors are jointly and
severally liable towards either the Company or any third parties from damages resulting from the violation of the
Luxembourg Company Law or the Company’s articles of association. Directors shall be discharged from such
liability in the case of a violation to which they were not a party provided no misconduct is attributable to them
and such violation has been reported to the first general meeting of shareholders after they have acquired
knowledge thereof.
Causes of action against directors for damages may be initiated by the Company upon a resolution of the general
shareholders’ meeting passed by a simple majority vote, irrespective of the number of shares represented at the
meeting. Causes of action against directors who misappropriate corporate assets or commit a breach of trust may
be brought by any shareholder for personal losses different from those of the Company.
An action may also be brought against the directors on behalf of the Company by shareholders who, at the
general meeting which decided to discharge such directors or members, owned voting securities representing at
least ten percent of the votes attaching to all such securities.
It is customary in Luxembourg that the shareholders expressly discharge the members of the board of directors
from any liability arising out of or in connection with the exercise of their mandate when approving the annual
accounts of the Company at the annual general shareholders meeting. However, any such discharge will not
release the directors from liability for any damage caused by unrevealed acts of mismanagement or unrevealed
breaches of the Luxembourg Company Law or the Company’s articles of association, nor will it release directors
from liability for any personal loss of the shareholders independent and separate from losses suffered by the
Company due to a breach either revealed or unrevealed of the Luxembourg Company Law or the Company’s
articles of association.
Under Luxembourg law, unless the decision of the board of directors relates to ordinary business entered into
under normal conditions, any director having a direct or indirect financial interest conflicting with that of the
Company in a transaction which has to be considered by the board of directors, must advise the board thereof
and cause a record of her/his statement to be included in the minutes of the meeting and may not take part in
the deliberations. At the next following general meeting, before any other resolution is put to vote, a special
report must be made on any transactions in which any of the directors may have had an interest conflicting with
that of the Company.
Auditors
The Company’s articles of association require the appointment of an independent audit firm in accordance with
applicable law. The primary responsibility of the auditor is to audit the Company’s annual accounts and
consolidated financial statements and to submit a report on the accounts to shareholders at the annual
shareholders’ meeting. In accordance with applicable law, auditors are chosen from among the members of the
Luxembourg Institute of Independent Auditors (Institut des réviseurs d’entreprises).
Auditors are appointed by the general shareholders’ meeting upon recommendation from the Company’s audit
committee through a resolution passed by a simple majority vote, irrespective of the number of shares
represented at the meeting, to serve one-year renewable terms. Auditors may be dismissed for reasonable cause
by the general shareholders’ meeting at any time. Luxembourg law does not allow directors to serve concurrently
as external auditors. As part of their duties, auditors report directly to the audit committee.
Pursuant to its charter, the Company’s audit committee is responsible for, among other things, the oversight of
the independence and performance of the Company’s external auditors. The audit committee is also responsible
to consider and make recommendations to the board of directors, to be put to shareholders for approval at the
annual general meeting of shareholders, regarding the appointment, re-appointment or removal of the
Company’s external auditors. In addition, the audit committee is responsible to review the appropriateness and
provision of permitted non-audit fees and to review and approve any fees (whether for audit, audit-related and
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Annual Report 2023
non-audit services) payable to the Company’s external auditors. On a yearly basis, in the performance of its
functions, the audit committee considers the appointment of the Company’s external auditors and reviews,
together with management and the external auditor, the audit plan, audit related services and other non-audit
services. The audit committee requests the board of directors to submit the audit committee’s recommendation
for the appointment of the Company’s external auditor for each fiscal year and the payment of applicable fees,
for final approval by the general shareholders’ meeting. The general shareholders’ meeting regularly approves
audit fees and authorizes the audit committee to approve any increase or reallocation of such audit fees as may
be necessary, appropriate or desirable under the circumstances. No services outside the scope of the audit
committee’s approval can be undertaken by the external auditor.
The shareholders’ meeting held on May 3, 2023, re-appointed PricewaterhouseCoopers S.C., Réviseurs
d’entreprises agréé (“PwC”), as the Company’s statutory auditor for the fiscal year ended December 31, 2023,
and appointed Ernst & Young S.A. (“EY”) as the Company’s statutory auditors for the fiscal year ending
December 31, 2024.
Senior Management
Our current senior management as of the date of this annual report consists of:
Name
Position
Mr. Paolo Rocca
Ms. Alicia Móndolo
Mr. Gabriel Podskubka
Mr. Antonio Caprera
Mr. Gabriel Casanova
Mr. Luis Scartascini
Mr. Marcelo Ramos
Mr. Luca Zanotti
Mr. Sergio de la Maza
Mr. Javier Martínez Alvarez
Mr. Michele Della Briotta
Chairman and Chief Executive Officer
Chief Financial Officer
Chief Operating Officer
Chief Industrial Officer
Chief Supply Chain Officer
Chief Human Resources Officer
Chief Technology Officer
President, United States
President, Mexico
President, Southern Cone
President, Europe
Age at
December 31, 2023
71
65
50
63
65
50
60
56
67
57
51
Paolo Rocca. Mr. Rocca is the Chairman of the Company’s board of directors and has been our chief executive
officer since 2002. He is a grandson of Agostino Rocca. He is also the chairman of the board of directors of
Ternium and a director and President of San Faustin. He is a member of the executive committee of the World
Steel Association. Mr. Rocca is an Italian citizen.
Alicia Móndolo. Ms. Móndolo currently serves as our Chief Financial Officer, a position she assumed in August
2019 and, since April 2023, has also assumed responsibility over the process improvement and information
technology department. Ms. Móndolo joined the Techint Group in 1984 and has more than 35 years of
experience in accounting and reporting, audit and finance. From 2010 to 2016, she served as Chief Audit
Executive of Tenaris. Previously and from 2016 to 2019, she served as financial officer in several companies in the
Techint Group. Ms. Móndolo is an Argentine and Italian citizen.
Gabriel Podskubka. Mr. Podskubka currently serves as our Chief Operating Officer, with responsibility for
coordinating the company’s sales and marketing, supply chain and production operations and product and service
development, a position he assumed in April 2023. After graduating as an industrial engineer in Argentina, Mr.
Podskubka joined Siderca in 1995 in the marketing department. He held various positions in the marketing,
commercial, and industrial areas of Tenaris until he was appointed as the head of our Eastern European
operations in 2009 and, in 2013, the president of our Eastern Hemisphere operations. Mr. Podskubka is an
Argentine citizen.
Antonio Caprera. Mr. Caprera currently serves as our Chief Industrial Officer, position he assumed in April 2017,
and since July 2023, he also assumed responsibility over the quality department. He joined the company in 1990.
From 2000 to 2006 he served as quality director at Dalmine in Italy, where he later assumed responsibilities as
production director until 2012. From that year and until 2015 he served as production director at Siderca in
Argentina, after which he assumed responsibilities as global industrial coordinator based in Mexico until March
2017. Mr. Caprera is an Italian citizen.
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Annual Report 2023
Gabriel Casanova. Mr. Casanova currently serves as our Chief Supply Chain Officer, with responsibility for the
execution of all contractual deliveries to customers. After graduating as a marine and mechanical engineer, he
joined Siderca’s export department in 1987. In 1995 he became Siderca’s Chief Representative in China and from
1997 to 2009 he held several positions in the commercial area in Dalmine. In 2009 he became the head of our
supply chain network and in October 2012 he assumed his current position. Mr. Casanova is an Argentine citizen.
Luis Scartascini. Mr. Scartascini currently serves as our Chief Human Resources Officer, a position he assumed in
January, 2022. After receiving a degree in industrial engineering, he started his career in Siderca in 1997 and then
moved to Houston in 2003 to be part of the company’s commercial office in the United States. In 2005 he moved
back to Argentina to serve as the director of the Global Trainee program before heading to Dubai in 2010 to lead
the Middle Eastern Business Unit and later support the acquisition of Saudi Steel Pipes. He returned to the United
States in 2018 as commercial vice president and played a leading role in the commercial integration of IPSCO. Mr.
Scartascini is an Argentine and Italian citizen.
Marcelo Ramos. Mr. Ramos currently serves as our Chief Technology Officer. Previously he served as corporate
quality director and managing director of NKKTubes. He joined the Techint Group in 1987 and has held various
positions within Tenaris. He assumed his current position in April 2010. Mr. Ramos is an Argentine citizen.
Luca Zanotti. Mr. Zanotti currently serves as president of our operations in the United States. In 2002, he joined
Exiros, the procurement company for the Techint Group, as planning and administration director. He was later
promoted to raw materials director and in July 2007 became managing director of Exiros, a position he held until
2010. He served as regional manager Europe, and managing director of Dalmine from 2011 to 2015, when he
assumed his current position. Before joining the Techint Group, he was a senior manager at A.T. Kearney in
Milan, where he worked from 1998 to 2002, and prior to that he held various business development positions in
the Far East for Lovato Electric. Mr. Zanotti is an Italian citizen.
Sergio de la Maza. Mr. de la Maza currently serves as our president, Mexico and also serves as managing director
and executive vice-president of Tamsa. He first joined Tamsa in 1980. From 1983 to 1988, Mr. de la Maza worked
in several positions in Tamsa. He then became manager of Tamsa’s new pipe factory and later served as
manufacturing manager and quality director of Tamsa. Subsequently, he was named manufacturing director of
Siderca. He assumed his current position in 2003. Mr. de la Maza is a Mexican citizen.
Javier Martínez Álvarez. Mr. Martínez Álvarez currently serves as president of our operations in the Southern
Cone, a position he assumed in June 2010, having previously served as our Andean area manager. He began his
career in the Techint Group in 1990, holding several positions including planning manager of Siderar and
commercial director of Ternium-Sidor. In 2006, he joined Tenaris as our Venezuela area manager. Mr. Martínez
Álvarez is an Argentine citizen.
Michele Della Briotta. Mr. Della Briotta currently serves as president of our operations in Europe, a position he
assumed in July 2016. He first joined Tenaris in 1997 and has worked in areas such as industrial planning,
operations, supply chain and commercial in Italy, Mexico, Argentina and the United States. Most recently he
served as Tenaris’s area manager for Romania. Mr. Della Briotta is an Italian citizen.
Compensation
The compensation payable to the members of the Company’s board of directors for the performance of their
services to the Company is determined at the annual ordinary general shareholders’ meeting. The general meeting
of shareholders held on May 3, 2023, approved the compensation paid to directors for the performance of their
duties during the fiscal year 2023 and resolved that (i) each director receives a fixed compensation for an amount
of $115,000; (ii) each director who is also a member of the Company’s audit committee receives an additional fee
of $55,000; and (iii) the chairperson of the Company’s audit committee receives an additional fee of $10,000. No
variable compensation has been paid or shall be payable to directors for services rendered during the year 2023
and no long-term incentive or pension plan is available to directors.
The compensation paid to the Company’s managing director or chief executive officer is determined by the board
of directors. The cash compensation paid or payable to the chief executive officer for the performance of his
duties during the year 2023 amounts to $9.5 million, of which $3 million corresponds to fixed compensation and
$6.5 million corresponds to variable compensation. No long-term incentive or pension plan is awarded to the
chief executive officer.
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Annual Report 2023
The aggregate cash compensation paid to all directors and senior managers of the Company for the year 2023
amounted to $47.5 million. This amount includes cash benefits paid to certain senior managers in connection
with pre-existing retirement plans. In addition, directors and senior managers received for the year 2023, 388
thousand units for a total amount of $5.6 million in connection with the employee retention and long-term
incentive program described in note II.P.3 “Accounting Policies - Employee benefits - Other long-term benefits” to
our audited consolidated financial statements included in this annual report.
The Luxembourg Law of August 1, 2019 (amending the Luxembourg Law of May 24, 2011) (the “Shareholders’
Rights Law”) on the exercise of certain rights of shareholders in general meetings of listed companies, which
transposes EU Directive 2017/828 of the European Parliament and of the Council of May 17, 2017 (amending
Directive 2007/36/EC) regarding the encouragement of long-term shareholder engagement in listed companies
within the Member States of the European Union, requires EU listed companies to adopt a Compensation Policy
setting forth the principles and guidelines for purposes of determining the compensation payable to the members
of the Company’s board of directors and the managing director or chief executive officer and annual
Compensation Reports describing the annual compensation paid to directors and the chief executive officer for
the performance of their duties.
The Company’s board of directors approved, at its meeting held on April 29, 2020, the Compensation Policy of
the Company, which was submitted to an advisory non-binding vote at the shareholders meeting held on June 2,
2020, and approved by majority vote. At its meeting held on February 21, 2024, the Company’s board of
directors approved certain amendments to the Compensation Policy, which will be submitted to an advisory non-
binding vote at the shareholders meeting scheduled to be held on April 30, 2024. The Compensation Policy is
available on the Company’s website and will be periodically reviewed and submitted to the non-binding vote of
the shareholders every four years, to the extent required by Luxembourg law, or in the event of a material
amendment thereto.
In addition, on February 21, 2024, the Company’s board of directors approved the 2023 Compensation Report,
which is available on the Company’s website and will be submitted to the non-binding vote of the shareholders at
the next general meeting of shareholders scheduled to be held on April 30, 2024.
On November 2, 2023, the Company’s board of directors approved a Clawback Policy, in response to the
requirements of Section 303A.14 of the New York Stock Exchange Listed Company Manual, setting forth the
principles for the prompt recovery or “clawback” of erroneously awarded incentive-based compensation granted
to certain officers of the Company in the event of a restatement of the Company’s financial statements, as further
described therein. The members of senior management listed in the section “Directors, Senior Management and
Employees”, as well as Mr. Stefano Bassi, the Company’s global reporting director, are subject to the Clawback
Policy.
Board Practices
Audit Committee
Pursuant to the Company’s articles of association, as supplemented by the audit committee’s charter, for as long
as the Company’s shares are listed on at least one regulated market, the Company must have an audit committee
composed of at least three members, the majority of whom must qualify as independent directors, provided,
however, that the composition and membership of the audit committee shall satisfy such requirements as are
applicable to, and mandatory for, audit committees of issuers such as the Company under any law, rule or
regulation applicable to the Company (including, without limitation, the applicable laws, rules and regulations of
such regulated market or markets).
Under the Company’s articles of association, an independent director is a director who:
•
•
•
is not and has not been employed by us or our subsidiaries in an executive capacity for the preceding five
years;
is not a person that controls us, directly or indirectly, and is not a member of the board of directors of a
company controlling us, directly or indirectly;
does not have (and is not affiliated with a company or a firm that has) a significant business relationship
with us, our subsidiaries or our controlling shareholder;
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Annual Report 2023
•
•
is not and has not been affiliated with or employed by a present or former auditor of us, our subsidiaries or
our controlling shareholder for the preceding five years; and
is not a spouse, parent, sibling or relative up to the third degree of any of the above persons.
The audit committee of the Company’s board of directors currently consists of three members: Mr. Simon Ayat,
Mr. Jaime José Serra Puche and Ms. Monica Tiuba, who were appointed to the audit committee by the
Company’s board of directors on May 3, 2023. As of the date of this annual report, all members of the audit
committee qualify as independent directors both for purposes of the Exchange Act Rule 10A-3(b)(1), and under
the Company’s articles of association. The board of directors of the Company has determined that Ms. Tiuba
qualifies as “audit committee financial expert” under applicable SEC rules and has competence in accounting or
auditing matters, as required by applicable Luxembourg law. In addition, the membership of the audit committee
as a whole has sufficient relevant knowledge of the business and financial experience to properly discharge its
functions.
The audit committee operates under a charter amended and restated by the board of directors on October 8,
2021. The audit committee assists the board of directors in its oversight responsibilities relating to (i) the integrity
of the Company’s financial statements; (ii) the effectiveness of the Company’s systems of internal control, risk
management and internal audit over financial reporting; and (iii) the independence and performance of the
Company’s external auditors. The audit committee also performs other duties entrusted to it by the Company’s
board of directors or required to be performed by it under applicable laws and regulations.
In addition, the audit committee is required to review and, where applicable, approve material transactions
between the Company or its subsidiaries and related parties, as provided in the Company’s articles of association,
or as may be required by any law, rule or regulation applicable to the Company, in order to determine whether
their terms are consistent with the interests of the Company and all its shareholders and are consistent with
market conditions or are otherwise fair to the Company and its subsidiaries. The Company has adopted a Related
Party Transactions Policy and Procedure setting forth the revised, updated and consolidated guidelines and
processes through which the Company identifies, approves and manages related party transactions, seeking to
assure transparency and substantial and procedural fairness of such transactions, as well as compliance with the
provisions in the Company’s articles of association and the audit committee charter relating to transactions with
related parties, Luxembourg rules relating to the approval and disclosure of material related party transactions,
and Section 314.00 of the NYSE Listed Company Manual.
Under the Company’s articles of association, as supplemented by the Related Party Transactions Policy and
Procedure, a “related party” is any of the following persons: (i) any affiliate of the Company; (ii) any entity in
which a controlling person owns a substantial interest or over which a controlling person can exercise significant
influence; (iii) any unconsolidated entity in which the Company has significant influence; (iv) any entity or
individual having significant influence over the Company, or a close family member of any such individual; (v) any
individual or entity that is the beneficial owner of five percent (5%) or more of the shares of the Company,
including through the ownership of any securities representing shares of the Company; (vi) any director or
executive officer of any of the controlling persons, the Company or any of the subsidiaries, or a close family
member of any such director or executive officer; (vii) any entity in which a substantial interest in the voting power
is owned, directly or indirectly, by any person described in (iv), (v) or (vi) above or over which such a person is able
to exercise significant influence; or (viii) any entity that has a member of key management in common with the
Company or any of its subsidiaries (provided that key management personnel includes persons having authority
and responsibility for planning, directing and controlling the activities of an entity, including directors and
executive officers and close family members of any such individuals).
With respect to the materiality threshold for review and approval of related party transactions, the Company’s
articles of association, as supplemented by the audit committee’s charter and the Related Party Transactions Policy
and Procedure, provide that the following related party transactions, which are qualified as “Level 1” related party
transactions, are subject to review by the audit committee, which shall make a recommendation to the board of
directors as to either reject or approve the proposed related party transaction:
• any transaction between the Company or its subsidiaries with related parties (i) with an individual value equal
to or greater than $10 million, or its equivalent in other currencies, or (ii) with an individual value lower than
$10 million, or its equivalent in other currencies, when the aggregate sum reflected in the financial statements
of the four fiscal quarters preceding the date of determination of any series of transactions for such lower
value that can be deemed to be parts of a unique or single transaction (but excluding any transactions that
were reviewed and approved by Company’s audit committee or board of directors, as applicable, or the
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Annual Report 2023
independent members of the board of directors of any of its subsidiaries) exceeds 1.5% of the Company’s
consolidated net sales made in the fiscal year preceding the year on which the determination is made; and
• any corporate reorganization transaction (including a merger, spin-off or bulk transfer of a business) affecting
the Company or any of its subsidiaries for the benefit of, or involving, a related party.
In addition, any related party transaction that does not qualify as a “Level 1” related party transaction, but which
has an individual value equal to or higher than $5 million (which is the value threshold determined by
management to be material to the Company for disclosure purposes under “Related Parties Transactions” of this
annual report), qualifies as a “Level 2” related party transaction and must be reviewed by the audit committee for
purposes of making a determination as to whether any conflicts of interest exist and whether the proposed
related party transaction is consistent with the interests of the Company and all shareholders, in order to either
reject or approve the proposed transaction. Any related party transaction that is for less than such value qualifies
as a “Level 3” related party transaction and is reviewed by the Company’s related-party transaction unit, the area
within the Company responsible for centralizing and compiling the information relating to all related party
transactions and performing the review, assessment and other procedures contemplated in the Related Party
Transactions Policy and Procedure.
The audit committee has the power (to the maximum extent permitted by applicable laws) to request that the
Company or relevant subsidiary promptly provide all information necessary for the audit committee to assess the
material transactions with related parties that it is required to review. In no event may any proposed related party
transaction be entered into or otherwise be given effect unless it has been reviewed and approved in accordance
with the Related Party Transactions Policy and Procedure. Any executed transaction that has not been duly
reviewed and approved must be promptly submitted for review in accordance with applicable procedures and, if
determined appropriate, must be ratified; if the transaction is not ratified, it must be modified to make it
acceptable for ratification or it must otherwise be immediately discontinued or rescinded.
The audit committee has the authority to conduct any investigation appropriate to the fulfillment of its
responsibilities and has direct access to the Company’s external auditors as well as anyone in the Company and,
subject to applicable laws and regulations, its subsidiaries. In addition, the audit committee may engage, at the
Company’s expense, independent counsel and other internal or external advisors to review, investigate or
otherwise advise on, any matter as the committee may determine to be necessary to carry out its purposes and
responsibilities.
The audit committee is also in charge of the interpretation, implementation, control and enforcement of the
Company’s Clawback Policy, which sets forth the principles for the prompt recovery of erroneously awarded
incentive-based compensation granted to certain officers of the Company in the event of a restatement of the
Company’s financial statements.
In addition, the Company has established a management-level Critical Risk Committee (“CRC”) that assists the
Company’s board of directors, the audit committee and the chief executive officer in connection with the
monitoring, assessment and review of risks to which Tenaris is exposed and in the oversight of the risk
management framework and processes, with a focus on critical risks (including accidents, cybersecurity,
commercial execution, environmental, health and safety and regulatory risks), the development of mitigating
actions, and the monitoring of action plans. The CRC operates under a Critical Risk Management revised charter
approved by the board of directors on April 26, 2023, which sets forth the roles, composition and responsibilities
of the CRC. The CRC assists the board of directors, the audit committee and the chief executive officer with the
oversight of the risks to which Tenaris is exposed and monitors the risk management process, including risk
mapping, mitigation and prevention, with a focus on critical risks. The CRC periodically reports to the board of
directors, the audit committee and the chief executive officer on its activities.
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Annual Report 2023
Employees
The following table shows the number of persons employed by Tenaris and its fully consolidated subsidiaries
(excluding Exiros, which is proportionally consolidated) as of December 31:
Mexico
Argentina
USA
Italy
Romania
Indonesia
Brazil
Canada
Colombia
Saudi Arabia
Other
2023
2022
2021
7,500
6,267
3,882
2,187
1,884
1,573
1,492
1,195
1,112
849
1,193
29,134
5,919
6,444
3,509
2,136
1,847
495
1,460
944
1,183
427
928
25,292
5,474
5,169
2,684
2,011
1,725
506
1,817
758
1,009
408
1,215
22,776
From December 2022 to December 2023, we increased our headcount by 3,842 people. This increase is primarily
driven by the acquisitions completed during 2023. The acquisition of the pipe coating business from Mattr,
resulted in the addition of nearly 2,800 employees to our workforce, mainly in Indonesia and Mexico, but also in
Canada, the United States, Norway and the United Arab Emirates. Also, the consolidation of GPC, resulted in an
increase in our staff of approximately 400 employees in Saudi Arabia. We reinforced health, safety, and
environment training to ensure all employees receive training to minimize incidents and accidents while keeping
quality and productivity levels high on the production lines.
Approximately two-thirds of our employees are unionized. In all countries where we have presence, we operate in
compliance with applicable rules and regulations. We forge our relations with the unions based on the premise of
an open dialogue and a rich interchange of proposals.
Tenaris is committed to leading with care, providing a flexible and agile working environment that encourages
health, safety and wellbeing, accountability, inclusion and trust, allowing employees to develop their skills and
careers while contributing to our goals.
In terms of human resources our goals are:
•
•
•
•
to foster trust and empower employees to manage and promote change and innovation, providing them
with the training and technological resources to succeed;
to embed sustainability values through transparent and effective processes, helping employees shape
their professional careers;
to encourage continuous learning and feedback through concrete tools; and
to respect and promote merit, diversity and inclusion in all its forms, focused on gender, age, culture and
background.
The Company’s Code of Conduct prohibits unlawful discrimination in employment relationships, granting any
person the right to apply for a position in Tenaris, or to be considered for a new position based on merit, without
arbitrary discrimination. The Company’s Human Resources Policy aims at affording equal opportunities by
requiring that hiring, promotion, transfer, notice periods, dialogue, rights and protection, as well as other
employment decisions be taken without regard for race, color, religious belief, gender, age, disability, national
origin or sexual orientation. Compensation and remuneration are based on each person’s duties, personal
performance, competence and behavior. Tenaris pursues a policy of inclusive corporate culture and leadership,
recognizing the range of benefits brought by embracing diversity in all its aspects, from gender to nationality and
age. Specifically, we are making headway in our drive to improve the gender balance, in the knowledge that
tackling the male-dominated traditions prevalent in the steel industry will contribute positively to our performance
culture.
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Annual Report 2023
Share Ownership
To our knowledge, as of December 31, 2023, our directors and senior management owned 858,712 Company
securities (in the form of shares or ADSs) which represents 0.07% of the Company’s issued share capital.
The following table provides information regarding share ownership reported to the Company by our directors and
senior management:
Director or Officer
Guillermo Vogel
Carlos Condorelli
Gabriel Podskubka
Total
Number of Issued
Shares Held
850,446
4,320
3,946
858,712
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Annual Report 2023
Major Shareholders and Related Party Transactions
Major Shareholders
The following table shows the beneficial ownership of the Company’s securities (in the form of shares or ADSs) by
(i) the Company’s major shareholders (persons or entities that have notified the Company of holdings in excess of
5% of the Company’s issued share capital), (ii) the Company’s directors and senior management as a group, and
(iii) shares repurchased under the existing share buyback program and held in treasury. The information below is
as of December 31, 2023. For more recent information on share repurchases under the Company’s share buyback
program, please refer to “Purchases of Equity Securities by the Issuer and Affiliated Purchasers”.
Identity of Person or Group
Number of Issued Shares
Percentage of Issued Share
Capital
San Faustin (1)
Directors and senior management as a group
Treasury shares (2)
Public
Total
60.45%
0.07%
1.07%
38.41%
100.00%
_________________________________________________________________________________________________
(1) San Faustin owns all of its shares in the Company, representing 60.45% of the Company’s share capital and 61.10% of the voting rights,
through its wholly-owned subsidiary Techint Holdings S.à r.l, the holder of record of the above-mentioned Tenaris shares. RP STAK held
voting rights in San Faustin sufficient in number to control San Faustin. No person or group of persons controls RP STAK
713,605,187
858,712
12,648,091
453,424,840
1,180,536,830
(2) Represents shares repurchased by the Company as of December 31, 2023, under its share buyback program.
The voting rights of the Company’s major shareholders do not differ from the voting rights of other shareholders.
No shares have any special control rights. The Company’s articles of association do not contain any provision that
would have the effect of delaying, deferring or preventing a change in control of the Company and that would
operate only with respect to a merger, acquisition or corporate restructuring involving the Company or any of its
subsidiaries.
The Company does not know of any significant agreements or other arrangements to which the Company is a
party and which take effect, alter or terminate in the event of a change of control of the Company. The Company
does not know of any arrangements, the operation of which may at a later date result in a change of control of
the Company.
Related Party Transactions
Tenaris is a party to several related party transactions as described in note 31 “Related party transactions” to our
Consolidated Financial Statements included in this annual report. Material related party transactions are subject to
the review of the audit committee of the Company’s board of directors and the requirements of Luxembourg law.
For further details on the approval process for related party transactions, see “Directors, Senior Management and
Employees – Board Practices – Audit Committee”.
Purchases of Steel Products and Raw Materials
In the ordinary course of business, we purchase round steel bars, flat steel products and other raw materials from
Ternium or its subsidiaries. These purchases were made on terms no less favorable to Tenaris than terms that
could have been obtained from unrelated third parties. These transactions include:
•
•
•
purchases of round steel bars made under a frame agreement for use in our seamless steel pipe operations
in Mexico, which amounted to $12 million in 2023, $111 million in 2022 and $157 million in 2021;
purchases of flat steel products for use in the production of welded pipes and accessories, which amounted
to $77 million in 2023, $101 million in 2022 and $32 million in 2021; and
purchases of scrap and other raw materials for use in the production of seamless pipes, which amounted to
$11 million in 2023, $12 million in 2022 and $9 million in 2021.
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Annual Report 2023
In the ordinary course of business, we purchase flat steel products from Usiminas for use in our welded steel pipe
operations. These purchases, which were made on terms no less favorable to Tenaris than terms have been
obtained from unrelated third parties, amounted to $225 million in 2023, $335 million in 2022 and $27 million in
2021.
Sales of Raw Materials
In the ordinary course of business, we sell ferrous scrap and other raw materials to Ternium or its subsidiaries.
These sales, which are made on similar terms and conditions as sales to other unrelated third parties, amounted to
$40 million in 2023, $39 million in 2022 and $36 million in 2021.
Purchase Agency Services and Sales of Materials
Exiros, in which we have 50% share ownership and Ternium owns the remaining 50%, provides purchase agency
services and raw materials and other products to various companies controlled by or under the significant
influence of San Faustin. Pursuant to the Exiros shareholders’ agreement, Tenaris recognizes Exiros’ assets,
liabilities, revenue and expenses in relation to its interest in the joint operation. Exiros’ total sales to companies
controlled by, or under the significant influence of, San Faustin totaled $65 million in 2023, $140 million in 2022
and $76 million in 2021.
Supply of Electric Energy
Techgen, which is currently owned 48% by Ternium, 30% by Tecpetrol and 22% by Tenaris, operates an electric
power plant in Pesquería, Mexico. Ternium and Tenaris currently contract 78% and 22%, respectively, of
Techgen’s power capacity. Techgen sells to third parties on behalf of Tenaris the unused electricity that Tenaris
purchased from Techgen.
Techgen net sales of electricity to Tenaris amounted to $73 million in 2023, $102 million in 2022 and $70 million
in 2021.
Supply of Natural Gas
We are party to contracts with Tecpetrol relating to the supply of natural gas to our operations in Argentina.
Tecpetrol is a company controlled by San Faustin, engaged in oil and gas exploration and production and has
rights to various oil and gas fields in Argentina and elsewhere in Latin America.
Tecpetrol supplies Tenaris’s Argentine subsidiaries with natural gas requirements under market conditions and
according to local regulations. Tecpetrol’s sales to Tenaris amounted to $42 million in 2023, $44 million in 2022,
and $32 million in 2021.
Provision of Engineering and Labor Services
Tenaris contracts with certain companies controlled by San Faustin specialized in supplying engineering services
and non-specialist manual labor services, such as industrial cleaning, general maintenance, handling of by-
products and construction services. Fees accrued for these services in the aggregate amounted to $69 million in
2023, $28 million in 2022 and $7 million in 2021.
Sales of Steel Pipes and Sucker Rods
In the ordinary course of business, we sell steel pipes, sucker rods and related services to other companies
controlled by or under the significant influence of San Faustin. These sales, which are made principally to
companies involved in the construction of gas pipelines and to Tecpetrol and joint ventures in which Tecpetrol
participates, for its oil and gas drilling operations, are made on similar terms and conditions as sales to unrelated
third parties. Our sales of steel pipes and sucker rods as well as logistical and certain other services to other
companies controlled by or under the significant influence of San Faustin amounted to $119 million in 2023,
$149 million in 2022 and $77 million in 2021.
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Sales of Fracking and Coiled Tubing Services
We provide fracking and coiled tubing services to Tecpetrol and joint ventures in which Tecpetrol participates, for
its oil and gas drilling operations, which amounted to $102 million in 2023, $102 million in 2022 and $45 million
in 2021.
Administrative Services, Legal and Other Support Services
Finma S.A. (“Finma”), a company controlled by San Faustin in which Tenaris has a 33% interest and other
affiliates of San Faustin own the remaining shares, provides administrative and legal support services to San
Faustin’s affiliates in Argentina, including Tenaris. Fees accrued for these services amounted to $13 million in
2023, $14 million in 2022 and $10 million in 2021.
Loans to Related Parties
Tenaris financed the construction and operation of Techgen’s Pesquería project primarily in the form of
subordinated loans to Techgen. Outstanding principal amount of loans to Techgen as of December 31, 2023,
amounted to $62 million and as of December 31, 2022 and 2021 amounted to $58 million. These loans
generated interest gains in favor of Tenaris in an amount of $6 million in 2023, $4 million in 2022 and $3 million
in 2021.
Dividends from Related Parties
Tenaris received dividend payments from Ternium in an amount of $67 million in 2023, $62 million in 2022 and
$67 million in 2021.
Tenaris received dividend payments from Usiminas in an amount of $3 million in 2023, $2 million in 2022 and
$12 million in 2021.
Dividends to Related Parties
Tenaris distributed dividends to Techint Holdings in an amount of $385 million in 2023, $321 million in 2022 and
$193 million in 2021.
Other Transactions
We entered into various contracts with Tenova (or certain of its subsidiaries), a company controlled by San Faustin,
for the provision of furnaces, spare parts, accessories and related services for our facilities. Supplies received
amounted to $19 million in 2023, $8 million in 2022 and $1 million in 2021.
In addition, in the ordinary course of business, from time to time, we carry out other transactions and enter into
other arrangements with other related parties, including natural gas transport services, rental services related to
the supply of coiled tubing services and information technology services, none of which are considered to be
material.
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Annual Report 2023
Financial Information
Consolidated Statements and Other Financial Information
See “Financial Statements”.
Legal Proceedings
Tenaris is from time to time subject to various claims, lawsuits and other legal proceedings, including customer,
employee, tax and environmental-related claims, in which third parties are seeking payment for alleged damages,
reimbursement for losses, or indemnity. Management with the assistance of legal counsel periodically reviews the
status of each significant matter and assesses potential financial exposure.
Some of these claims, lawsuits and other legal proceedings involve highly complex issues, and often these issues
are subject to substantial uncertainties and, therefore, the probability of loss and an estimation of damages are
difficult to ascertain. Accordingly, with respect to a large portion of such claims, lawsuits and other legal
proceedings, the Company is unable to make a reliable estimate of the expected financial effect that will result
from ultimate resolution of the proceeding. In those cases, the Company has not accrued a provision for the
potential outcome of these cases.
If a potential loss from a claim, lawsuit or other proceeding is considered probable and the amount can be
reasonably estimated, a provision is recorded. Accruals for loss contingencies reflect a reasonable estimate of the
losses to be incurred based on information available to management as of the date of preparation of the financial
statements and take into consideration litigation and settlement strategies. In a limited number of ongoing cases,
the Company was able to make a reliable estimate of the expected loss or range of probable loss and, depending
on the likelihood of occurrence, in some of such cases has accrued a provision for such loss but believes that
publication of this information on a case-by-case basis would seriously prejudice the Tenaris’s position in the
ongoing legal proceedings or in any related settlement discussions. Accordingly, in these cases, the Company has
disclosed information with respect to the nature of the contingency but has not disclosed its estimate of the range
of potential loss.
The Company believes that the aggregate provisions recorded for potential losses in its consolidated financial
statements (see notes 24 “Non-current allowances and provisions” and 25 “Current allowances and provisions”
to our audited consolidated financial statements included in this annual report) are adequate based upon
currently available information. However, if management’s estimates prove incorrect, current reserves could be
inadequate and the Company could incur a charge to earnings which could have a material adverse effect on its
results of operations, financial condition, net worth and cash flows.
Material Legal Proceedings
A summary description of Tenaris’s material outstanding legal proceedings as of December 31, 2023, is included
in note 27 “Contingencies, commitments and restrictions to the distribution of profits” to our audited
consolidated financial statements included in this annual report, which summary description is incorporated herein
by reference. In addition, Tenaris is subject to other legal proceedings, none of which is believed to be material.
Dividend Policy
The Company does not have, and has no current plans to establish, a formal dividend policy governing the
amount and payment of dividends or other distributions. For a description of the shareholders’ and holders of
ADS’ rights to receive dividends and the conditions to declare and pay dividends, please refer to “Corporate
Governance Statement – Corporate Governance”.
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Annual Report 2023
The following table shows the dividends approved by the Company’s shareholders in the last five years:
Shareholders’ meeting date
May 6, 2019
June 2, 2020
May 3, 2021
May 3, 2022
May 3, 2023
Approved dividend
Dividend payment date
Amount
(USD million)
Per share (USD)
Per ADS
(USD)
Interim Dividend
Dividend
Balance
484
153
248
484
602
0.41
0.13
0.21
0.41
0.51
0.82 November 2018 May 2019
0.26 November 2019
0.42 November 2020 May 2021
0.82 November 2021 May 2022
1.02 November 2022 May 2023
NA
On February 21, 2024, the Company’s board of directors proposed, for the approval of the annual general
shareholders’ meeting scheduled to be held on April 30, 2024, the payment of an annual dividend of $0.60 per
share ($1.20 per ADS), or approximately $700 million, which includes the interim dividend of $0.20 per share
($0.40 per ADS) or approximately $235 million, paid on November 22, 2023. If the annual dividend is approved
by the shareholders, a dividend of $0.40 per share ($0.80 per ADS), or approximately $465 million will be paid on
May 22, 2024, with an ex-dividend date of May 20, 2024. Treasury shares are not entitled to dividend
distributions.
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Annual Report 2023
The Offer and Listing
Offer and Listing Details
The shares are listed on the Mexican Stock Exchange and its ADSs are listed on the NYSE under the symbol “TS”.
The shares are also listed on the Italian Stock Exchange under the symbol “TEN”. Trading on the NYSE and the
Mexican Stock Exchange began on December 16, 2002, and trading on the Italian Stock Exchange began on
December 17, 2002.
As of February 29, 2024, a total of 1,180,536,830 shares were registered in the Company’s shareholder register
(including 21,870,189 shares that have been repurchased by the Company under its share buyback program). As
of February 29, 2024, a total of 140,768,752 shares were registered in the name of the Depositary for the
Company’s ADS program.
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Annual Report 2023
Additional Information
Exchange Controls
Many of the countries that are important markets for us or in which we have substantial assets have histories of
substantial government intervention in currency markets, volatile exchange rates and government-imposed
currency controls. These include mainly Argentina, Brazil, Indonesia, Mexico, Nigeria and Romania.
The exchange rate of the ARS against the U.S. dollar was subject to a devaluation of approximately 356% against
the U.S. dollar during 2023.
Between September 2019 and December 2023, the Argentine government imposed significant restrictions on
foreign exchange transactions; however, the new administration in Argentina eased certain restrictions and other
changes to such regulations are expected. At the date of this annual report, the application of existing foreign
exchange regulations remains uncertain, and the scope and timing of upcoming changes remain
unknown. Currently, Argentine companies are required to repatriate export proceeds from sales of goods and
services (including U.S. dollars obtained through advance payment and pre-financing facilities) and convert such
proceeds into ARS at the official exchange rate. As from December 13, 2023, up to 20% of export proceeds can
be sold for Argentine pesos through securities transactions resulting in a higher implicit exchange rate as
explained below. This percentage has changed and is expected to change over time. Sovereign bonds were issued
to pay imports of goods cleared and services rendered on or prior to December 12, 2023, but such bonds cover
only a portion total import debts. Import payments for services rendered and goods cleared after December 12,
2023, do not require government approval but cannot be paid in advance or at sight and are subject to deferred
payment schedules. In addition, import payments are subject to import taxes that significantly increase prices of
imported goods and services. Argentine companies must still obtain prior Central Bank authorization, which is
rarely (if ever) granted, to access the foreign exchange market to make dividend payments.
The existing measures substantially limit the ability of Argentine companies to obtain foreign currency and make
certain payments and distributions out of Argentina at the official exchange rate. Access to foreign currency and
transfers out of Argentina can be achieved, however, through securities transactions involving bonds or shares
with multiple listings, resulting in a different implicit exchange rate, generally higher than the official exchange
rate. Such transactions are subject to certain restrictions and limits, which change from time to time, and often
result in a financial loss being generated at the time of making any such transaction.
As of December 31, 2023, the total net equity of Argentine subsidiaries represented approximately 9% of Tenaris’s
total equity.
For additional information regarding factors affecting the Argentine economy, see “Key Information – Risk Factors
– Risks Relating to our Business and Industry – Adverse economic or political conditions in the countries where we
operate or sell our products and services may decrease our sales or disrupt our manufacturing operations, thereby
adversely affecting our revenues, profitability and financial condition”. For additional information on current
foreign exchange restrictions in Argentina, see note 29 “Foreign exchange control measures in Argentina” of our
audited consolidated financial statements included in this annual report.
Taxation
The following discussion of the material Luxembourg and U.S. federal income tax consequences of an investment
in our shares and ADSs is based upon laws and relevant interpretations thereof in effect as of the date of this
annual report, all of which are subject to change. This discussion does not address all possible tax consequences
relating to an investment in our shares or ADSs, including the tax consequences under U.S. state and local tax
laws.
Grand Duchy of Luxembourg
This section describes the material Luxembourg tax consequences of owning or disposing of shares or ADSs.
It is not intended to be, nor should it be construed to be, legal or tax advice. You should, therefore, consult your
own tax advisor regarding local or foreign tax consequences, including Luxembourg tax consequences of owning
and disposing of shares or ADSs in your particular circumstances.
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As used herein, a “Luxembourg individual” means an individual resident in Luxembourg who is subject to
personal income tax (impôt sur le revenu) on his or her worldwide income from Luxembourg or foreign sources,
and a “Luxembourg corporate holder” means a company (that is, a fully taxable collectivité within the meaning of
Article 159 of the Luxembourg Income Tax Law) resident in Luxembourg subject to Luxembourg corporate income
tax (impôt sur le revenu des collectivités) and Luxembourg municipal business tax (impôt commercial communal)
on its worldwide income from Luxembourg or foreign sources. For the purposes of this summary, Luxembourg
individuals and Luxembourg corporate holders are collectively referred to as “Luxembourg Holders”. A “non-
Luxembourg Holder” means any investor in shares or ADSs of the Company other than a Luxembourg Holder.
Corporate Reorganization
The Company was established as a Luxembourg société anonyme holding under Luxembourg’s 1929 holding
company regime. Until termination of such regime on December 31, 2010, holding companies incorporated
under the 1929 regime (including the Company) were exempt from Luxembourg corporate income tax,
Luxembourg municipal business tax, Luxembourg net wealth tax and Luxembourg withholding tax over dividends
distributed to shareholders.
On January 1, 2011, the Company became an ordinary public limited liability company (société anonyme) and,
effective as from that date, the Company is subject to all applicable Luxembourg taxes, (including, among others,
Luxembourg corporate income tax on its worldwide income).
In light of the impending termination of Luxembourg’s 1929 holding company regime, in the fourth quarter of
2010, the Company carried out a multi-step corporate reorganization, which included, among other transactions,
the contribution of most of the Company’s assets and liabilities to a wholly-owned, newly-incorporated
Luxembourg subsidiary and the restructuring of indirect holdings in certain subsidiaries. The first phase of the
corporate reorganization was completed in December 2010 and resulted in a non-taxable revaluation of the
accounting value (under Luxembourg GAAP) of the Company’s assets. The second phase of the reorganization
was completed in 2011.
Following the completion of the first phase of the corporate reorganization, and upon its conversion into an
ordinary Luxembourg holding company, the Company recorded a special reserve in its tax balance sheet. Dividend
distributions for the foreseeable future will be charged to the special reserve and therefore should not be subject
to Luxembourg withholding tax.
Tax regime applicable to realized capital gains
Luxembourg Holders
Luxembourg resident individual holders
Capital gains realized by Luxembourg resident individuals who do not hold their shares or ADSs as part of a trade
or business (i.e. capital gains on private assets) and who hold (together, directly or indirectly, with his or her
spouse or civil partner and underage children) no more than 10% of the share capital of the Company, at any
time during the five-year period preceding the disposition will only be taxable (at a progressive rate) if they are
realized on a sale of shares or ADSs that takes place before their acquisition or within the first six months
following their acquisition (i.e. speculative gain). After the six-month period, capital gains are not taxed unless the
resident individual holds (together, directly or indirectly, with his or her spouse or civil partner and underage
children) more than 10% of the share capital of the Company at any time during the five-year period preceding
the disposition.
If such shares or ADSs are held as part of a commercial or industrial business, capital gains would be taxable in the
same manner as income from such business.
Capital gains realized by Luxembourg resident individuals holding (alone or together with the resident’s spouse or
civil partner and underage children) directly or indirectly more than 10% of the capital of the Company at any
time during the five years prior to the sale, (or if the Luxembourg resident individuals have received the shares for
no consideration within the last five years and the former holder held at least 10% in the capital of the company
at any moment during said five years) will be taxable at half of the individual’s applicable global tax rate (as
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Annual Report 2023
determined progressively), if a holding period of six months following their acquisition elapsed (21% for 2023).
Within the six-month period, progressive income tax rates apply (ranging from 0 to 42%5 in 2023).
Luxembourg resident corporate holders
Capital gains, including currency exchange gains, realized upon the disposal of shares or ADSs by a fully taxable
resident corporate holder will in principle be subject to Luxembourg corporate income tax and Luxembourg
municipal business tax. The combined applicable rate (including an unemployment fund contribution) for a
corporate holder established in Luxembourg-City is 24.94% for the fiscal year ending 2023. An exemption from
such taxes may be available to the Luxembourg resident corporate holder pursuant to Article 1 of the Grand Ducal
Decree dated December 21, 2001, as amended, in combination with article 166 of the Luxembourg Income Tax
Law subject to the fulfillment of the conditions set forth therein.
Non-Luxembourg Holders
Non-Luxembourg individual holders
An individual who is a non-Luxembourg holder of shares or ADSs (and who does not have a permanent
establishment, a permanent representative or a fixed place of business in Luxembourg) will only be subject to
Luxembourg taxation on capital gains arising upon disposal of such shares or ADSs if such holder has (alone or
together with his or her spouse, civil partner and underage children) directly or indirectly held more than 10% of
the capital of the Company at any time during the past five years preceding the disposal, and either (i) such non-
Luxembourg holder has been a resident of Luxembourg for tax purposes for at least 15 years and has become a
non-resident within the last five years preceding the realization of the gain, subject to any applicable tax treaty, or
(ii) the disposal of shares or ADSs occurs within six months from their acquisition (or prior to their actual
acquisition), subject, however, to any applicable tax treaty.
Non-Luxembourg corporate holders
A corporate non-Luxembourg holder (that is, a collectivité within the meaning of Article 159 of the Luxembourg
Income Tax Law), which has a permanent establishment, a permanent representative or a fixed place of business
in Luxembourg to which shares or ADSs are attributable, will bear Luxembourg corporate income tax and
Luxembourg municipal business tax on a gain realized on a disposal of such shares or ADSs as set forth above for
a Luxembourg corporate holder. However, capital gains, including currency exchange gains, realized on the sale
of the shares or ADSs may benefit from the full exemption provided for by Article 1 of the Grand Ducal Decree
dated December 21, 2001, as amended, in combination with Article 166 of the Luxembourg Income Tax Law
subject in each case to fulfillment of the conditions set out therein.
A corporate non-Luxembourg holder, which has no permanent establishment, permanent representative or fixed
place of business in Luxembourg to which the shares or ADSs are attributable, will bear non-resident capital gains
tax on a gain realized on a disposal of such shares or ADSs under the same conditions applicable to an individual
non-Luxembourg holder, as set out above.
Tax regime applicable to distributions
Withholding tax
Distributions to holders are in principle subject to a 15% Luxembourg withholding tax computed on the gross
amount distributed. The rate of the withholding tax may be reduced pursuant to double tax treaties existing
between Luxembourg and the country of residence of the relevant holder, subject to the fulfillment of the
conditions set forth therein. However, distributions imputed for tax purposes to the special reserve (please see
above paragraph “corporate reorganization”) should be exempt from Luxembourg withholding tax under the
current tax law.
5 A 7% surcharge for the Employment Fund applies on the income tax due. The surcharge for the Employment Fund amounts to 9% for
taxpayer in tax class 1 or 1a with taxable income exceeding EUR 150,000 (EUR 300,000 for taxpayer in tax class 2).
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Nevertheless, a withholding tax exemption may apply if the distribution is made to (as far as relevant in the case at
hand):
•
•
•
•
•
•
a Luxembourg resident corporate holder (that is, a fully taxable collectivité within the meaning of article
159 of the Luxembourg Income Tax Law);
an undertaking of collective character which is resident of a Member State of the European Union and is
referred to by article 2 of the EU Council Directive of November 30, 2011, concerning the common fiscal
regime applicable to parent and subsidiary companies of different member states (2011/96/UE) as
amended, (subject to the general anti-abuse rule provided for by Council Directive 2015/121/EU as
implemented into Luxembourg law);
a capital company or a cooperative company resident in Norway, Iceland or Liechtenstein and subject to a
tax comparable to corporate income tax as provided by the Luxembourg Income Tax Law;
a capital company resident in Switzerland which is subject to corporate income tax in Switzerland without
benefiting from an exemption;
an undertaking with a collective character subject to a tax comparable to corporate income tax as provided
by the Luxembourg Income Tax Law which is resident in a country that has concluded a double tax treaty
with Luxembourg; and
a Luxembourg permanent establishment of one of the above-mentioned categories, provided each time
that at the date of payment, the holder holds or commits to hold directly (or through a company regarded
as tax transparent from a Luxembourg tax perspective), during an uninterrupted period of at least twelve
months, shares or ADSs representing at least 10% of the share capital of the Company or acquired for an
acquisition price of at least EUR 1,200,000.
Luxembourg Holders
With the exception of Luxembourg corporate holders benefiting from the exemption referred to above,
Luxembourg individual holders, and Luxembourg corporate holders fully subject to Luxembourg corporate tax,
must include the distributions paid on the shares or ADSs in their taxable income, 50% of the amount of such
dividends being exempt from tax. The applicable withholding tax can, under certain conditions, entitle the
relevant Luxembourg Holder to a tax credit.
Non-Luxembourg Holders
Non-Luxembourg Holders of shares or ADSs and who do not have a permanent establishment, a permanent
representative or a fixed place of business in Luxembourg to which the shares or ADSs would be attributable are
not liable for any Luxembourg tax on dividends paid on the shares or ADSs, other than a potential withholding tax
as described above.
Net wealth tax
Luxembourg Holders
Luxembourg net wealth tax will not be levied on a Luxembourg holder with respect to the shares or ADSs held
unless (i) the Luxembourg holder is a legal entity subject to net wealth tax in Luxembourg; or (ii) the shares or
ADSs are attributable to an enterprise or part thereof which is carried on through a permanent establishment, a
fixed place of business or a permanent representative in Luxembourg.
Net wealth tax is levied annually at the rate of 0.5% for taxable net wealth not exceeding EUR 500,000,000 and
at a rate of 0.05% for the net wealth exceeding EUR 500,000,000, of enterprises resident in Luxembourg, as
determined for net wealth tax purposes. The shares or ADSs may be exempt from net wealth tax subject to the
conditions set forth by Paragraph 60 of the Luxembourg Law of October 16, 1934, on the valuation of assets
(Bewertungsgesetz), as amended.
A minimum net wealth tax charge applies as of January 1, 2016, for all corporate entities having their statutory
seat or central administration in Luxembourg. Subject to certain conditions, the amount of minimum net wealth
tax may vary.
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Non-Luxembourg Holders
Luxembourg net wealth tax will not be levied on a non-Luxembourg holder with respect to the shares or ADSs
held unless the shares or ADSs are attributable to an enterprise or part thereof which is carried on through a
permanent establishment or a permanent representative in Luxembourg. The shares or ADSs may be exempt from
net wealth tax subject to the conditions set forth by Paragraph 60 of the Luxembourg Law of October 16, 1934
on the valuation of assets (Bewertungsgesetz), as amended.
Stamp and registration taxes
No registration tax or stamp duty will be payable by a holder of shares or ADSs in Luxembourg solely upon the
disposal of shares or ADSs by sale or exchange.
Estate and gift taxes
No estate or inheritance tax is levied on the transfer of shares or ADSs upon the death of a holder of shares or
ADSs in cases where the deceased was not a resident of Luxembourg for inheritance tax purposes and no gift tax
is levied upon a gift of shares or ADSs if the gift is not passed before a Luxembourg notary or recorded in a deed
registered in Luxembourg.
Where a holder of shares or ADSs is a resident of Luxembourg for tax purposes at the time of the holder’s death,
the shares or ADSs are included in its taxable estate for inheritance tax or estate tax purposes.
U.S. federal income taxation
This section describes the material U.S. federal income tax consequences to a U.S. holder (as defined below) of
owning shares or ADSs. It applies to you only if you hold your shares or ADSs as capital assets for U.S. federal
income tax purposes. This discussion addresses only U.S. federal income taxation and does not discuss all of the
tax consequences that may be relevant to you in light of your individual circumstances, including foreign, state or
local tax consequences, estate and gift tax consequences, and tax consequences arising under the Medicare
contribution tax on net investment income or the alternative minimum tax. This section does not apply to you if
you are a member of a special class of holders subject to special rules, including:
•
•
•
•
•
•
•
•
•
•
a dealer in securities;
a bank;
a trader in securities that elects to use a mark-to-market method of accounting for securities holdings;
a tax-exempt organization;
a person who invests through a pass-through entity, including a partnership;
a life insurance company;
a person that actually or constructively owns 10% or more of the combined voting power of our voting
stock or of the total value of our stock (including ADSs);
a person that holds shares or ADSs as part of a straddle or a hedging or conversion transaction for U.S.
federal income tax purposes;
a person that purchases or sells shares or ADSs as part of a wash sale for U.S. federal income tax purposes;
or
a person whose functional currency is not the U.S. dollar.
This section is based on the Internal Revenue Code of 1986, as amended, its legislative history, existing and
proposed regulations, published rulings and court decisions, all as currently in effect, as well as on the Convention
between the Government of the Grand Duchy of Luxembourg and the Government of the United States of
America for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on
Income and Capital (the “Treaty”). These laws are subject to change, possibly on a retroactive basis. In addition,
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this section is based in part upon the assumption that each obligation in the ADS deposit agreement and any
related agreement will be performed in accordance with its terms.
If an entity or arrangement that is treated as a partnership for U.S. federal income tax purposes holds the shares
or ADSs, the U.S. federal income tax treatment of a partner will generally depend upon the status of the partner
and the activities of the partnership. Each such partner of a partnership that holds the shares or ADSs is urged to
consult his, her or its own tax advisor.
You are a U.S. holder if you are a beneficial owner of shares or ADSs and you are, for U.S. federal income tax
purposes:
•
•
•
•
an individual citizen or resident of the United States;
a domestic corporation (or an entity treated as a domestic corporation);
an estate whose income is subject to U.S. federal income tax regardless of its source; or
a trust if (i) a U.S. court can exercise primary supervision over the trust’s administration and one or more
U.S. persons are authorized to control all substantial decisions of the trust or (ii) the trust has a valid
election in effect under applicable U.S. Treasury regulations to be treated as a U.S. person.
In general, and taking into account the earlier assumptions, for U.S. federal income tax purposes, if you hold
ADSs, you will be treated as the owner of the shares represented by those ADSs. Exchanges of shares for ADSs,
and ADSs for shares, generally will not be subject to U.S. federal income tax.
The tax treatment of your shares or ADSs will depend in part on whether or not we are classified as a passive
foreign investment company (“PFIC”), for United States federal income tax purposes. Except as discussed below
under “PFIC Rules”, this discussion assumes that we are not classified as a PFIC for United States federal income
tax purposes.
You should consult your own tax advisor regarding the U.S. federal, state and local and other tax consequences
of owning and disposing of shares or ADSs in your particular circumstances.
Taxation of distributions
Under the U.S. federal income tax laws, if you are a U.S. holder, the gross amount of any distribution we pay out
of our current or accumulated earnings and profits (as determined for U.S. federal income tax purposes), other
than certain pro-rata distributions of our shares, will be treated as a dividend that is subject to U.S. federal income
taxation. If you are a non-corporate U.S. holder, dividends paid to you that constitute qualified dividend income
will be taxable to you at the preferential rates applicable to long-term capital gains provided that you hold shares
or ADSs for more than 60 days during the 121-day period beginning 60 days before the ex-dividend date and
meet other holding period requirements. Dividends we pay with respect to the shares or ADSs generally will be
qualified dividend income, provided that, in the year that you receive the dividend, we are eligible for the benefits
of the Treaty. We believe that we are currently eligible for the benefits of the Treaty and therefore expect that
dividends on the shares or ADSs will be qualified dividend income, but there can be no assurance that we will
continue to be eligible for the benefits of the Treaty.
You must generally include any Luxembourg tax withheld from the dividend payment in this gross amount even
though you do not in fact receive it. The dividend is taxable to you when you receive it, or, in the case of ADSs,
when the Depositary receives the dividend, actually or constructively. The dividend will not be eligible for the
dividends-received deduction generally allowed to U.S. corporations in respect of dividends received from other
U.S. corporations. Distributions in excess of current and accumulated earnings and profits, as determined for U.S.
federal income tax purposes, will be treated as a non-taxable return of capital to the extent of your basis in the
shares or ADSs and thereafter as capital gain. However, we do not expect to calculate earnings and profits in
accordance with U.S. federal income tax principles. Therefore, you should expect that a distribution will generally
be treated as a dividend (as discussed above).
Dividends will generally be income from sources outside the United States and, generally, will be “passive”
income for purposes of computing the foreign tax credit allowable to you.
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Annual Report 2023
Subject to certain limitations, the Luxembourg tax withheld in accordance with the Treaty and paid over to
Luxembourg may be creditable or deductible against your U.S. federal income tax liability. However, under
recently finalized U.S. Treasury regulations, it is possible that taxes may not be creditable unless you are eligible
for and elect to apply the benefits of the Treaty. Special rules apply in determining the foreign tax credit limitation
with respect to dividends that are subject to the preferential tax rates. To the extent a refund of the tax withheld
is available to you under Luxembourg law or under the Treaty, the amount of tax withheld that is refundable will
not be eligible for credit against your U.S. federal income tax liability.
In certain circumstances, if you have held ADSs for less than a specified minimum period during which you are not
protected from risk of loss, or are obligated to make payments related to the dividends, you will not be allowed a
foreign tax credit for foreign taxes imposed on dividends that we pay.
The rules governing the foreign tax credit are complex. You are urged to consult your tax advisors regarding the
availability of the foreign tax credit under your particular circumstances.
Taxation of capital gains
If you are a U.S. holder and you sell or otherwise dispose of your shares or ADSs, you will recognize capital gain or
loss for U.S. federal income tax purposes equal to the difference between the U.S. dollar value of the amount that
you realize and your tax basis, determined in U.S. dollars, in your shares or ADSs. Capital gain of a non-corporate
U.S. holder is generally taxed at preferential rates where the property is held for more than one year. The gain or
loss will generally be income or loss from sources within the United States for foreign tax credit limitation
purposes. The deductibility of capital losses is subject to limitations.
PFIC rules. Based on the Company’s current and expected income and assets, we believe that the shares or ADSs
should not currently be treated as stock of a PFIC for U.S. federal income tax purposes, and we do not expect to
become a PFIC in the foreseeable future. However, this conclusion is a factual determination that is made annually
and thus may be subject to change. It is therefore possible that we could become a PFIC in a future taxable year.
If we were to be treated as a PFIC, gain realized on the sale or other disposition of your shares or ADSs would in
general not be treated as capital gain. Furthermore, if you are a U.S. holder, unless you are permitted to elect and
you do elect to be taxed annually on a mark-to-market basis with respect to the shares or ADSs, upon sale or
disposition of your shares or ADSs, you would generally be treated as if you had realized such gain and certain
“excess distributions” ratably over your holding period for the shares or ADSs and would be taxed at the highest
tax rate in effect for each such year to which the gain was allocated, together with an interest charge in respect
of the tax attributable to each such year. With certain exceptions, your shares or ADSs will be treated as stock in a
PFIC if we were a PFIC at any time during your holding period in your shares or ADSs. Dividends that you receive
from us will not be eligible for the special tax rates applicable to qualified dividend income if we are a PFIC (or are
treated as a PFIC with respect to you) either in the taxable year of the distribution or the preceding taxable year,
but instead will be taxable at rates applicable to ordinary income and subject to the excess distribution regime
described above.
Documents on Display
The Company is subject to the reporting requirements of the Exchange Act, as applied to foreign private issuers.
Accordingly, the Company is required to file annual and special reports and other information with the SEC;
however, foreign private issuers are not required to deliver proxy statements or to file quarterly reports. We
prepare quarterly and annual consolidated financial statements in accordance with IFRS. The Company’s annual
consolidated financial statements are audited by an independent accounting firm. The Company submits quarterly
financial information with the SEC on Form 6-K simultaneously with or promptly following the publication of such
information in Luxembourg and any other jurisdiction in which the Company’s securities are listed. In addition, the
Company files annual reports on Form 20-F within the time period required by the SEC, which is currently four
months from the close of the Company’s fiscal year on December 31. Reports and other information filed
electronically with the SEC are available at the SEC’s Internet website at http://www.sec.gov. In addition, such
reports and other communications are made available to all shareholders and holders of ADSs on the Company’s
website at: https://ir.tenaris.com/investor-relations.
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Annual Report 2023
For the year ended December 31, 2023, Deutsche Bank Trust Company Americas acted as depositary under the
ADSs deposit agreement. As long as the deposit agreement remains in effect, the Company will furnish the
Depositary with:
•
•
its annual reports; and
copies of all notices of shareholders’ meetings and other reports and communications that are made
generally available to the Company’s shareholders.
The Depositary will, as provided in the deposit agreement and if requested in writing by the Company, arrange for
the mailing of such reports, notices and communications to all record holders of ADSs, on a basis similar to that
for holders of shares, or on such other basis as the Company may advise the Depositary may be required by any
applicable law or regulation or any requirement of any stock exchange to which the Company may be subject.
Any reports and communications, including any proxy solicitation material, shall be furnished in English to the
extent such materials are required to be translated into English pursuant to any regulations of the SEC.
Any record holder of ADSs may read the reports, notices, and other communications including any proxy
solicitation material at the Depositary’s office located at One Columbus Circle, New York, New York 10019.
In addition, such reports, notices and other communications are made available to all shareholders and holders of
ADSs on the Company’s website at: https://ir.tenaris.com/investor-relations
Whenever a reference is made in this annual report to a contract or other document, please be aware that such
reference is not necessarily complete and that you should refer to the exhibits that are a part of this annual report
for a copy of the contract or other document.
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Annual Report 2023
Quantitative and Qualitative Disclosure about Market Risk
The multinational nature of our operations and customer base expose us to a variety of risks, including the effects
of changes in foreign currency exchange rates, interest rates and commodity prices. In order to reduce the impact
related to these exposures, management evaluates exposures on a consolidated basis to take advantage of natural
exposure netting. For the residual exposures, we may enter into various derivative transactions in order to reduce
potential adverse effects on our financial performance. Such derivative transactions are executed in accordance
with internal policies and hedging practices. We do not enter into derivative financial instruments for trading or
other speculative purposes, other than non-material investments in structured products.
The following information should be read together with section III, “Financial risk management” to our audited
consolidated financial statements included elsewhere in this annual report.
Debt Structure
The following tables provide a breakdown of our debt instruments at December 31, 2023 and 2022 which
included fixed and variable interest rate obligations, detailed by maturity date:
At December 31, 2023
(in millions of U.S. dollars)
2024
2025
Expected maturity date
2027
2026
2028
Thereafter
Total (1)
Non-current Debt
Fixed rate
Variable rate
Current Debt
Fixed rate
Variable rate
-
-
271
264
535
24
23
-
-
47
-
2
-
-
2
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
24
25
271
264
583
At December 31, 2022
(in millions of U.S. dollars)
2023
2024
Expected maturity date
2026
2025
2027
Thereafter
Total (1)
Non-current Debt
Fixed rate
Variable rate
Current Debt
Fixed rate
Variable rate
-
-
479
203
682
19
23
-
-
42
-
3
-
-
3
-
2
-
-
2
-
-
-
-
-
-
-
-
-
-
19
28
479
203
729
(1) As most borrowings are based on short-term fixed rates, or variable rates that approximate market rates, with interest rate resetting every
3 to 6 months, the fair value of the borrowings approximates its carrying amount and is not disclosed separately.
Our weighted average interest rates before tax (considering hedge accounting), amounted to 10.56% at
December 31, 2023 and to 9.45% at December 31, 2022.
Our financial liabilities (other than trade payables and derivative financial instruments) consist mainly of bank
loans. As of December 31, 2023, U.S. dollar denominated financial debt plus debt denominated in other
currencies swapped to the U.S. dollar represented 60% of total financial debt.
For further information about our financial debt, please see note 21 “Borrowings” to our audited consolidated
financial statements included in this annual report.
Interest Rate Risk
Fluctuations in market interest rates create a degree of risk by affecting the amount of our interest payments. At
December 31, 2023, we had variable interest rate debt of $288 million and fixed rate debt of $295 million (of the
fixed rate debt, $271 million is short-term).
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Annual Report 2023
Foreign Exchange Rate Risk
We manufacture and sell our products in a number of countries throughout the world and consequently we are
exposed to foreign exchange rate risk. Since the Company’s functional currency is the U.S. dollar, the purpose of
our foreign currency hedging program is mainly to reduce the risk caused by changes in the exchange rates of
other currencies against the U.S. dollar.
Most of our revenues are determined or influenced by the U.S. dollar. In addition, a relevant part of our costs
corresponds to steelmaking raw materials and steel coils and plates, also determined or influenced by the U.S.
dollar. However, outside the United States, a portion of our expenses is incurred in foreign currencies (e.g. labor
costs). Therefore, when the U.S. dollar weakens in relation to the foreign currencies of the countries where we
manufacture our products, the U.S. dollar-reported expenses increase. Had the U.S. dollar average exchange rate
been weaker by 5% against the currencies of the countries where we have labor costs, operating income would
have decreased approximately by $71 million in 2023, compared to $60 million in 2022.
Our consolidated exposure to currency fluctuations is reviewed on a periodic basis. A number of hedging
transactions are performed in order to achieve an efficient coverage in the absence of operative or natural
hedges. Almost all of these transactions are forward exchange rate contracts.
Because certain subsidiaries have functional currencies other than the U.S. dollar, the results of hedging activities
as reported in the income statement under IFRS may not reflect entirely management’s assessment of its foreign
exchange risk hedging needs. Also, intercompany balances between our subsidiaries may generate exchange rate
results to the extent that their functional currencies differ.
The value of our financial assets and liabilities is subject to changes arising out of the variation of foreign currency
exchange rates. The following table provides a breakdown of our main financial assets and liabilities (including
foreign exchange derivative contracts) that impact our profit and loss as of December 31, 2023.
All amounts in millions of U.S. dollars
Currency Exposure
Functional currency
Long / (Short) Position
Argentine Peso
Euro
Saudi Arabian Riyal
U.S. dollar
U.S. dollar
U.S. dollar
(135)
(204)
(182)
The main relevant exposures as of December 31, 2023, were to ARS-denominated financial, trade, social and
fiscal payables at our Argentine subsidiaries, for which the functional currency is the U.S. dollar, Euro-
denominated intercompany liabilities at certain subsidiaries whose functional currency is the U.S. dollar and Saudi
Arabian Riyal-denominated financial and trade payables. The Saudi Arabian Riyal is tied to the dollar.
Foreign Currency Derivative Contracts
The net fair value of our foreign currency derivative contracts amounted to a liability of $2 million at December
31, 2023 and an asset of $27 million at December 31, 2022. For further detail on our foreign currency derivative
contracts, please see note 26 “Derivative financial instruments – Foreign exchange and commodities derivative
contracts and hedge accounting” to our audited consolidated financial statements included in this annual report.
Concentration of Credit Risk
No single customer comprised more than 10% of our net sales in 2023, 2022 and 2021.
Tenaris maintains a strong, longstanding relationship with Pemex, one of the world’s largest crude oil and
condensates producers and one of its largest customers. Over the past several months, Pemex has delayed
payments beyond the agreed-upon due dates, resulting in Tenaris having a significant credit exposure to Pemex,
which represented approximately 20% of the Company’s overall credit exposure as of December 31, 2023. The
Company has not historically had any material write-offs due to uncollectible accounts receivable relating to this
customer. Although the parties are in continuous conversations and Pemex is making partial payments on a
periodic basis, at this stage the Company cannot predict whether or not its exposure to Pemex will be reduced, or
the timing for any such reduction.
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Annual Report 2023
Our credit policies related to sales of products and services are designed to identify customers with acceptable
credit history, and to allow us to use credit insurance, letters of credit and other instruments designed to minimize
credit risk whenever deemed necessary. We maintain allowances for potential credit losses.
Commodity Price Risk
In the ordinary course of its operations, Tenaris purchases commodities and raw materials that are subject to price
volatility caused by supply conditions, political and economic variables and other factors. As a consequence,
Tenaris is exposed to risk resulting from fluctuations in the prices of these commodities and raw materials. Tenaris
fixes the prices of such raw materials and commodities for short-term periods, typically not in excess of one year,
and in general hedging for these risks is performed on a limited basis.
Commodities Derivative Contracts
The net fair value of our commodities derivative contracts amounted to an asset of $0.2 million at December 31,
2023 and a liability of $3.4 million at December 31, 2022. For further detail on our commodities derivative
contracts, please see note 26 “Derivative financial instruments – Foreign exchange and commodities derivative
contracts and hedge accounting” to our audited consolidated financial statements included in this annual report.
Accounting for Derivative Financial Instruments and Hedging Activities
Derivative financial instruments are classified as financial assets (or liabilities) at fair value through profit or loss.
Their fair value is calculated using standard pricing techniques and, as a general rule, we recognize the full
amount related to the change in its fair value under financial results in the current period.
We designate for hedge accounting certain derivatives and non-derivative financial liabilities to hedge risks
associated with recognized assets, liabilities or highly probable forecast transactions. These instruments are
classified as cash flow hedges. The effective portion of the fair value of such derivatives is accumulated in a
reserve account in equity. Amounts accumulated in equity are then recognized in the income statement in the
same period when the offsetting losses and gains on the hedged item are recorded. The gain or loss relating to
the ineffective portion is recognized immediately in the income statement. The fair value of our derivative financial
instruments (assets or liabilities) continues to be reflected on the consolidated statement of financial position.
At December 31, 2023 and 2022 the effective portion of designated cash flow hedges, included in other reserves
in shareholders’ equity amounted to a credit of $8.1 million and a credit of $13.1 million respectively.
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Annual Report 2023
Description of Securities Other Than Equity Securities
American Depositary Shares
According to the Company’s deposit agreement, holders of ADSs may have to pay to the Depositary, either
directly or indirectly, fees or charges up to the amounts set forth below:
•
•
•
•
•
•
•
a fee of $5.00 (or less) per 100 ADSs (or portion of 100 ADSs) for: issuance of ADSs, including issuances
resulting from a distribution of shares or rights or other property; and cancellation of ADSs for the purpose
of withdrawal, including if the deposit agreement terminates;
a fee of $0.02 (or less) per ADSs for any cash distribution to ADS registered holders, excluding cash
dividend;
any charges for taxes and other governmental charges that the Depositary or the custodian may be
required to pay on any ADS or share underlying an ADS (e.g., share transfer taxes, stamp duty or
withholding taxes); and any charges incurred by the Depositary or its agents for servicing the depositary
securities;
registration or transfer fees for transfer and registration of shares on our share register to or from the name
of the Depositary or its agent when you deposit or withdraw shares;
expenses of the Depositary for cable, telex and facsimile transmissions (when expressly provided in the
deposit agreement) and conversion of foreign currency;
a fee equivalent to the fee that would be payable if securities distributed to ADS holders had been shares
and the shares had been deposited for issuance of ADSs for distribution of securities distributed to holders
of deposited securities which are distributed by the Depositary to ADS registered holders; and
as necessary, charges for any costs incurred by the Depositary or its agents for servicing the deposited
securities.
The Depositary collects its fees for delivery and surrender of ADSs directly from investors depositing shares or
surrendering ADSs for the purpose of withdrawal or from intermediaries acting for them. The Depositary collects
fees for making distributions to investors by deducting those fees from the amounts distributed or by selling a
portion of distributable property to pay the fees. The Depositary may collect its annual fee for depositary services
by deduction from cash distributions or by directly billing investors or by charging the book-entry system accounts
of participants acting for them. The Depositary may generally refuse to provide fee-attracting services until its fees
for those services are paid.
Under the deposit agreement with the Depositary, the Depositary is not liable to holders of ADSs, except that the
Depositary agrees to perform its obligations specifically set forth therein without gross negligence and willful
misconduct.
Fees Payable by the Depositary to the Company
Under its agreement with the Depositary, the Company is entitled to receive certain fees from the Depositary,
based on the Depositary’s revenues resulting from issuance and cancellation fees charged to ADR holders, net of
custody and safe keeping costs. In addition, the Depositary has waived the cost of providing administrative and
reporting services, and access charges in connection with the Company’s ADR Program.
Fees paid in 2023
In 2023, the Company received from the Depositary fees for an amount of $932,082, corresponding to the
period March 13, 2022 through March 12, 2023.
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Annual Report 2023
Fees payable during 2024
In 2024, the Company received from the Depositary fees for an amount of $667,139, corresponding to the
period March 13, 2023 through March 12, 2024.
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Annual Report 2023
Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Under the supervision and with the participation of our management, including the Company’s chief executive
officer and chief financial officer, we have evaluated the effectiveness of the design and operation of our
disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange
Act) as of December 31, 2023.
Based on that evaluation, the Company’s chief executive officer and chief financial officer have concluded that, as
of December 31, 2023, our disclosure controls and procedures are effective to ensure that information required to
be disclosed by us in the reports we file or submit under the Exchange Act is recorded, processed, summarized
and reported within the time periods specified in the SEC’s rules and forms and to ensure that such information is
accumulated and communicated to management, including the Company’s chief executive officer and chief
financial officer, to allow timely decisions regarding required disclosure. Our disclosure controls and procedures
are designed to provide reasonable assurance of achieving their objectives. The Company’s chief executive officer
and chief financial officer have concluded that our disclosure controls and procedures are effective at a reasonable
assurance level.
Management’s Report on Internal Control over Financial Reporting
Management is responsible for establishing and maintaining adequate internal control over financial reporting (as
such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act). Our internal control over financial
reporting was designed by management to provide reasonable assurance regarding the reliability of financial
reporting and the preparation and fair presentation of its financial statements for external purposes in accordance
with IFRS.
In addition, under the Company’s articles of association, as supplemented by the audit committee’s charter, the
audit committee assists the board of directors in fulfilling its oversight responsibilities relating to the effectiveness
of the Company’s systems of internal control, risk management and internal audit over financial reporting. In
particular, the audit committee is required to review the scope and results of the activities of the Company’s
external auditors and the internal audit function relating to the Company’s internal control over financial
reporting, and obtain reports on significant findings and recommendations; and is also required to assess, at least
annually at the time the annual accounts are approved, the effectiveness of the Company’s systems of internal
control and risk management over financial reporting.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect
misstatements or omissions. In addition, projections of any evaluation of effectiveness to future periods are
subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of
compliance with the policies or procedures may deteriorate.
On a yearly basis, management conducts its assessment of the effectiveness of Tenaris’s internal control over
financial reporting based on the framework in Internal Control- Integrated Framework (2013) issued by the
Committee of Sponsoring Organizations of the Treadway Commission.
As allowed under applicable SEC guidance, management’s assessment of internal control over financial reporting
excludes the operations of BSIBV and its subsidiaries, which were acquired on November 30, 2023. BSIBV and its
subsidiaries total assets and total revenues excluded from management’s assessment of internal control over
financial reporting represent approximately 2% and 1%, respectively, of the related consolidated financial
statement amounts as of and for the year ended December 31, 2023.
On February 20, 2024, management reported to the Audit Committee of the Company’s board of directors that
management had conducted its assessment of the effectiveness of the Company’s internal controls over financial
reporting for the year ended December 31, 2023, and that, based on management’s evaluation and considering
the inherent limitations to the effectiveness of any internal control system, management had concluded that the
Company’s internal controls over financial reporting were effective as of December 31, 2023.
The effectiveness of Tenaris’s internal control over financial reporting as of December 31, 2023, has been audited
by PwC, as indicated in its “Report of Independent Registered Public Accounting Firm” included in this annual
report.
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Annual Report 2023
Change in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting (as such term is defined in Rules 13a -15(f)
and 15d -15(f) under the Exchange Act) during the year ended December 31, 2023, that have materially affected,
or are reasonably likely to materially affect, our internal control over financial reporting.
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Annual Report 2023
Audit Committee Financial Expert
The Company’s board of directors has determined that Ms. Monica Tiuba, the audit committee’s chairperson,
meets the attributes defined by the SEC for an “audit committee financial expert” and has competence in
accounting or auditing matters, as required by applicable Luxembourg law. In addition, the audit committee, as a
whole, has sufficient relevant knowledge of the business and financial experience to properly discharge its
functions. The audit committee has the authority to engage, at the Company’s expense, independent counsel and
other internal or external advisors to review, investigate or otherwise advise on, any matter, as the audit
committee may determine to be necessary to carry out its purposes and responsibilities.
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Annual Report 2023
Code of Ethics
The Company has adopted a general code of conduct incorporating guidelines and standards of integrity and
transparency applicable to all directors, officers and employees. As far as the nature of each relation permits, all
principles detailed in the code of conduct also apply to relations with our contractors, subcontractors, suppliers
and associated persons. In addition, the Company has adopted a code of ethics for senior financial officers, which
is intended to supplement the Company’s code of conduct, and applies specifically to the principal executive
officer, the principal financial officer, the principal accounting officer or controller, as well as persons performing
similar functions.
Our code of conduct and our code of ethics for senior financial officers are posted on our website at:
https://www.tenaris.com/en/sustainability/governance-and-ethics/
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Annual Report 2023
Principal Accountant Fees and Services
Principal Accountant Fees
In 2023 and 2022, PwC served as the Company’s statutory auditor. Fees accrued to PwC and other PwC member
firms for the years ended December 31, 2023 and December 31, 2022 are detailed below.
Thousands of U.S. dollars
Audit Fees
Audit-Related Fees
Tax Fees
All Other Fees
Total
For the year ended December 31,
2023
2022
4,386
273
148
14
4,821
3,966
255
-
11
4,232
In addition, PwC member firms rendered $242 thousand for tax services to the pipe coating business acquired
from Mattr.
Audit Fees
Audit fees were paid for professional services rendered by the statutory auditors for the audit of the Company’s
consolidated financial statements and internal control over financial reporting, the statutory financial statements
of the Company and its subsidiaries, and any other audit services required under applicable securities laws,
including SEC regulations and other regulatory requirements.
Audit-Related Fees
Audit-related fees are typically services that are reasonably related to the performance of the audit or review of
the Company’s consolidated financial statements and the statutory financial statements of the Company and its
subsidiaries and are not reported under the audit fee item above. This item includes fees for attestation services
on financial information of the Company and its subsidiaries included in their annual reports required to be filed
with competent regulators.
Tax Fees
Fees paid for tax compliance professional services.
All Other Fees
Fees paid for the support in the development of training courses.
Audit Committee’s Pre-approval Policies and Procedures
The Company’s Audit Committee is responsible for, among other things, the oversight of the Company’s external
auditors. Under its charter, the audit committee is responsible to review the appropriateness of, and approve, in
advance, the provision of any permissible non-audit services by the external auditors; and to review and approve
any fees, whether for audit, audit-related, or non-audit services payable to the external auditors.
The audit committee makes its recommendations to the shareholders’ meeting concerning the continuing
appointment or termination of the Company’s external auditors. On a yearly basis, the audit committee reviews,
together with management and the external auditor, the audit plan, audit related services and other permissible
non-audit services and approves, ad-referendum of the general shareholders’ meeting, the related fees. With
respect to non-audit services, the audit committee annually approves an estimated amount for undetermined
non-audit services, conditioned upon final review and approval of such services by the audit committee. The audit
committee annually receives from the external auditor the written disclosures required by PCAOB Rule 3524
“Audit Committee Pre-Approval of Certain Tax Services”, together with a description of the scope of tax services
for such year, and the external auditors’ confirmation that such non-audit services are consistent with the
Sarbanes-Oxley Act, SEC Regulation S-X Rule 2-01, and applicable PCAOB rules. The Audit Committee did not
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Annual Report 2023
approve any fees pursuant to the de minimis exception to the pre-approval requirement provided by paragraph
(c)(7)(i)(C) of Rule 2-01 of Regulation S-X during 2023 or 2022.
The general shareholders’ meeting normally approves such audit fees and authorizes the audit committee to
approve any increase or reallocation of such audit fees as may be necessary, appropriate or desirable under the
circumstances. No services outside the scope of the audit committee’s approval may be undertaken by the
external auditor.
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Annual Report 2023
Purchases of Equity Securities by the Issuer and Affiliated Purchasers
On June 2, 2020, at the Company’s general meeting of shareholders, the Company’s shareholders authorized the
Company and the Company’s subsidiaries to acquire, from time to time, shares, including shares represented by
ADSs, on the following terms and conditions:
•
•
•
•
•
•
•
•
•
Purchases, acquisitions or receipts of securities may be made in one or more transactions as the board of
directors of the Company or the board of directors or other governing bodies of the relevant entity, as
applicable, considers advisable.
The maximum number of securities acquired pursuant to this authorization may not exceed 10% of the
Company’s issued shares or, in the case of acquisitions made through a stock exchange in which the
securities are traded, such lower amount as may not be exceeded pursuant to any applicable laws or
regulations of such market. The number of securities acquired as a block may amount to the maximum
permitted amount of purchases.
The purchase price per share to be paid in cash may not exceed 125% (excluding transaction costs and
expenses), nor may it be lower than 75% (excluding transaction costs and expenses), in each case of the
average of the closing prices of the Company’s securities in the stock exchange through which the
Company’s securities are acquired, during the five trading days in which transactions in the securities were
recorded in such stock exchange preceding (but excluding) the day on which the Company’s securities are
acquired. For over-the-counter or off-market transactions, the purchase price per ADS to be paid in cash
may not exceed 125% (excluding transaction costs and expenses), nor may it be lower than 75%
(excluding transaction costs and expenses), in each case of the average of the closing prices of the ADSs in
the NYSE during the five trading days in which transactions in ADSs were recorded in the NYSE preceding
(but excluding) the day on which the ADSs are acquired; and, in the case of acquisition of securities, other
than in the form of ADSs, such maximum and minimum per security purchase prices shall be equal to the
prices that would have applied in case of an ADS purchase pursuant to the formula above divided by the
number of underlying shares represented by an ADS at the time of the relevant purchase. Compliance with
maximum and minimum purchase price requirements in any and all acquisitions made pursuant to this
authorization (including, without limitation, acquisitions carried out through the use of derivative financial
instruments or option strategies) shall be determined on and as of the date on which the relevant
transaction is entered into, irrespective of the date on which the transaction is to be settled.
The above maximum and minimum purchase prices shall, in the event of a change in the par value of the
securities, a capital increase by means of a capitalization of reserves, a distribution of securities under
compensation or similar programs, a stock split or reverse stock split, a distribution of reserves or any other
assets, the redemption of capital, or any other transaction impacting on the Company’s equity, be adapted
automatically, so that the impact of any such transaction on the value of the securities shall be reflected.
The acquisitions of securities may not have the effect of reducing the Company’s net assets below the sum
of the Company’s share capital plus its undistributable reserves.
Only fully paid-up securities may be acquired pursuant to this authorization.
The acquisitions of securities may be carried out for any purpose, as may be permitted under applicable
laws and regulations, including without limitation to reduce the share capital of the Company, to offer
such shares to third parties in the context of corporate mergers or acquisitions of other entities or
participating interests therein, for distribution to the Company’s or the Company’s subsidiaries’ directors,
officers or employees or to meet obligations arising from convertible debt instruments.
The acquisitions of securities may be carried out by any and all means, as may be permitted under
applicable laws and regulations, including through any stock exchange in which the Company’s securities
are traded, through public offers to all shareholders of the Company to buy securities, through the use of
derivative financial instruments or option strategies, or in over-the-counter or off-market transactions or in
any other manner.
The acquisitions of securities may be carried out at any time, during the duration of the authorization,
including during a tender offer period, as may be permitted under applicable laws and regulations.
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•
•
The authorization granted to acquire securities shall be valid for such maximum period as may be provided
for under applicable Luxembourg law as in effect from time to time (such maximum period being, as of to
date, 5 years).
The acquisitions of securities shall be made at such times and on such other terms and conditions as may
be determined by the board of directors of the Company or the board of directors or other governing
bodies of the relevant subsidiary, provided that, any such purchase shall comply with Article 430-15 et. seq.
of the Luxembourg Company Law (or any successor law) and, in the case of acquisitions of securities made
through a stock exchange in which the Company’s securities are traded, with any applicable laws and
regulations of such market.
On November 1, 2023, the Company’s board of directors approved a share buyback program of up to $1.2 billion
to be completed within a one-year period and executed in the open market, with the intention to cancel the shares
acquired through the program.
On November 5, 2023, the Company announced that it had entered into a non-discretionary buyback agreement
with a primary financial institution, which made its trading decisions concerning the timing of the purchases of the
Company’s shares independently of and uninfluenced by Tenaris and acted in compliance with applicable rules and
regulations, including the Market Abuse Regulation 596/2014 and the Commission Delegated Regulation (EU)
2016/1052. Under the buyback agreement, purchases of shares could continue during any closed or blackout
periods of Tenaris in accordance with applicable regulations.
This first tranche of the share buyback program commenced on November 6, 2023, and was completed on January
12, 2024. As of December 31, 2023, the Company repurchased 12,648,091 shares (equivalent to 1.07% of the
issued share capital) for a total consideration of EUR198 million, equivalent to $214 million; and as at the end of
the first tranche of the program, the Company repurchased 17,779,302 shares (representing 1.51% of the issued
share capital) for a total consideration of EUR276 million, or $300 million. The Company intends to cancel the
treasury shares repurchased as at the end of the first tranche of its share buyback program in the upcoming
extraordinary general meeting of shareholders, scheduled to be held on April 30, 2024 (immediately after the annual
general meeting of shareholders) and reduce the Company’s issued share capital accordingly. See “Shareholders’
Meetings; Voting Rights; Election of Directors” for more information.
On February 25, 2024, the Company announced that, in connection to the second tranche of its previously
announced share buyback program, it had entered into another non-discretionary buyback agreement with a
primary financial institution, which will make its trading decisions concerning the timing of the purchases of the
Company’s shares independently of and uninfluenced by Tenaris and will act in compliance with applicable rules
and regulations, including the Market Abuse Regulation 596/2014 and the Commission Delegated Regulation
(EU) 2016/1052. Under the buyback agreement, purchases of shares may continue during any closed or blackout
periods of Tenaris in accordance with applicable regulations.
This $300 million second tranche of the share buyback program commenced on February 26, 2024, and is
expected to end no later than May 24, 2024. Additional shares repurchased under the share buyback program
will be held in treasury and will be cancelled in due course.
For further information on the Company’s share buyback program, please refer to our corporate website under
the “Share Buyback Program” section https://ir.tenaris.com/share-buyback-program.
In the future, we may, on the terms and subject to the conditions above referred, initiate another share capital
repurchase or similar program or engage in other transactions pursuant to which we may repurchase, directly or
indirectly, the Company’s securities. In addition, we or our subsidiaries may enter into transactions involving sales
or purchases of derivatives or other instruments, either settled in cash or through physical delivery of securities,
with returns linked to the Company’s securities. The timing and amount of repurchase transactions under any
such future program, or sales or purchases of derivatives or other instruments, will depend on market conditions
as well as other corporate and regulatory considerations.
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2023
Total number of
shares purchased
Average price
paid per share
in USD
Total number of shares purchased
as part of publicly announced plan
or program
Approximate million USD value
of shares that may yet be
purchased under the plan or
program
November 1 - November 30
December 1 - December 31
Total
8,940,855
3,707,236
12,648,091
17.1
16.7
8,940,855
3,707,236
1,047
986
12,648,091
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Annual Report 2023
Change in Registrant’s Certifying Accountant
Since 2011, PricewaterhouseCoopers S.C., Réviseurs d’entreprises agréé (“PwC”) served as the Company’s
statutory auditor. Following the completion of a tender process for the selection of a replacement audit firm for
the year 2024, as required under applicable EU and Luxembourg mandatory auditor rotation rules, on November
3, 2022, the Company’s board of directors, based on the audit committee’s recommendation, recommended the
annual general shareholders’ meeting to appoint Ernst & Young S.A. (“EY”) as the Company’s statutory auditors
for the fiscal year ending December 31, 2024. The annual general shareholders meeting held on May 3, 2023
approved the appointment of EY as the Company’s statutory auditor for the fiscal year ending December 31,
2024.
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Annual Report 2023
Corporate Governance Statement
The Company’s corporate governance practices are governed by Luxembourg Law (including, among others, the
Luxembourg Company Law, the Luxembourg Law of January 11, 2008 on transparency requirements for issuers,
as amended (which transposes EU Directive 2004/109 of the European Parliament and of the Council of
December 15, 2004), the Shareholders’ Rights Law and the Luxembourg law of July 23, 2016, concerning the
audit profession (the “Audit Reform Law”) and by the Company’s articles of association. The following is a
summary of certain rights of holders of the Company’s shares and includes the information required under the
Luxembourg Law on takeovers of May 19, 2006. Shareholders’ rights are set out in the Company’s articles of
association and are provided by applicable Luxembourg law and may differ from those typically provided to
shareholders of U.S. companies under the corporation laws of some states of the United States. This summary is
not exhaustive and does not contain all the information that may be important to investors. For more complete
information, you should read the Company’s articles of association, which are attached as an exhibit to this
annual report.
Corporate Governance
Memorandum and Articles of Association
The Company is a public limited liability company (société anonyme) organized under the laws of Luxembourg,
registered under the number B85 203 in the Luxembourg Registre de Commerce et des Sociétés. Its object and
purpose, as set forth in Article 2 of its articles of association, is the taking of interests, in any form, in corporations
or other business entities, and the administration, management, control and development thereof.
The Company’s authorized share capital is fixed by the Company’s articles of association as amended from time to
time with the approval of shareholders at an extraordinary general shareholders’ meeting. The Company has an
authorized share capital of a single class of 2,500,000,000 shares having a nominal value of USD1.00 per share.
There were 1,180,536,830 shares issued as of the date of this annual report, including treasury shares. All issued
shares are fully paid. As at the end of the first tranche of its share buyback program, the Company had
repurchased 17,779,302 shares which are expected to be cancelled in the upcoming extraordinary shareholders
meeting scheduled to be held on April 30, 2024.
The Company’s articles of association authorize the board of directors, or any delegate(s) duly appointed by the
board of directors, to issue shares within the limits of the authorized share capital against contributions in cash,
contributions in kind or by way of available reserves, at such time and on such terms and conditions, including the
issue price, as the board of directors, or its delegate(s), may in its or their discretion resolve.
The Company’s extraordinary shareholders’ meeting held on June 2, 2020 approved the renewal for an additional
five-year period of the authorization granted to the board of directors to waive, suppress or limit any preemptive
subscription rights of shareholders provided for by law to the extent it deems such waiver, suppression or
limitation advisable for any issue or issues of shares within the authorized share capital; and have waived any
preemptive subscription rights provided for by law and related procedures. The validity period of such
authorization will expire on June 12, 2025. However, under the Company’s articles of association, the Company’s
existing shareholders shall have a preferential right to subscribe for any new shares issued pursuant to the
authorization granted to its board of directors, except in the following cases (in which cases no preemptive
subscription rights shall apply):
•
•
any issuance of shares (including, without limitation, the direct issuance of shares or upon the exercise of
options, rights convertible into shares, or similar instruments convertible or exchangeable into shares)
against a contribution other than in cash; and
any issuance of shares (including by way of free shares or at discount), up to an amount equal to 1.5% of
the issued share capital of the Company, to directors, officers, agents or employees of the Company, its
direct or indirect subsidiaries, or its affiliates, including, without limitation, the direct issuance of shares or
upon the exercise of options, rights convertible into shares, or similar instruments convertible or
exchangeable into shares, issued for the purpose of compensation or incentive for any such persons or in
relation thereto (which the board of directors shall be authorized to issue upon such terms and conditions
as it deems fit).
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Amendment of the Company’s articles of association requires the approval of shareholders at an extraordinary
shareholders’ meeting with a two-thirds majority vote of the shares represented at the meeting.
The Company is controlled by San Faustin, which owns 60.45% of the Company’s issued share capital, through its
wholly owned subsidiary Techint Holdings S.à r.l. The Dutch private foundation (Stichting) RP STAK holds voting
rights in San Faustin sufficient to control San Faustin. No person or group of persons controls RP STAK.
As of December 31, 2023, (i) 38.41% of the Company’s issued share capital was publicly traded on the Italian Stock
Exchange and the Mexican Stock Exchange; in addition, the Company’s ADSs trade on the NYSE; (ii) a 0,07% was
held by the Company’s directors and senior management as a group; and (iii) the remaining 1.07% of the
Company’s issued share capital was held in treasury. See “Major Shareholders and Related Party Transactions”.
Dividends
Subject to applicable law, all issued shares (including shares underlying ADSs) are entitled to participate equally in
dividends when, as and if declared by the shareholders at the annual general shareholders’ meeting, out of funds
legally available for such purposes. Treasury shares are not entitled to dividend distributions.
Dividends may be lawfully declared and paid if the Company’s net profits and distributable reserves are sufficient
under Luxembourg law. The amount and payment of dividends must be approved by a majority vote at a general
shareholders’ meeting, generally, but not necessarily, based on the recommendation of the Company’s board of
directors. Under Article 21 of the Company’s articles of association, the board of directors has the power to
distribute interim dividends out of profits, share premium or any other available reserves, in accordance with
applicable law, in particular in accordance with the conditions set forth in Article 461-3 of the Luxembourg
Company Law. Such dividend payments must be finally approved by the general shareholders’ meeting. On
February 21, 2024 the board of directors announced the proposals to be submitted to the consideration of the
annual general shareholders’ meeting, including its proposal on dividends.
As provided by Article 21 of the Company’s articles of association, dividends or other distributions declared by the
general meeting as well as interim dividends or other distributions declared by the board of directors will be
distributed at the times and places determined by the board of directors. The Company will make any and all
dividend payments and any other distributions in respect of shares registered in the name of any securities
settlement system or operator of such a system or in the name of any financial institution or other professional
depositary of securities or any other depositary, whether in cash, shares or other assets, only to such registered
holder, or otherwise in accordance with such registered holder’s instructions, and, as provided by Article 21 of the
Company’s articles of association, that payment shall release the Company from any and all obligations for such
payment.
The Company conducts and will continue to conduct its operations through subsidiaries and, accordingly, its main
source of cash to pay dividends, among other possible sources, will be the dividends received from its subsidiaries.
For further information see “Key Information – Risk Factors – Risks Relating to the Structure of the Company –
The Company’s dividend payments depend on the results of operations and financial condition of its subsidiaries
and could be restricted by legal, contractual or other limitations or tax changes”.
Under Luxembourg law, claims for dividends will lapse in favor of the Company five years after the date such
dividends are declared. However, the Company may elect to pay a declared dividend after such period. Declared
and unpaid dividends held by the Company for the account of its shareholders do not bear interest.
Pursuant to Luxembourg law, at least 5% of our net profits per year must be allocated to the creation of a legal
reserve until such reserve has reached an amount equal to 10% of the Company’s issued share capital. If the legal
reserve later falls below the 10% threshold, at least 5% (or such lower amount required to reach the 10%
threshold) of net profits again must be allocated toward the reserve. As of December 31, 2023, the Company’s
legal reserve represented 10% of its share capital. The legal reserve is not available for distribution.
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Annual Report 2023
Shareholders’ Meetings; Voting Rights; Election of Directors
Each share entitles the holder thereof to one vote at the Company’s general shareholders’ meetings, provided
that, under Luxembourg law, voting rights with respect to treasury shares shall be suspended for so long as such
shares are held. Shareholder action by written consent is not permitted, but proxy voting is permitted. Notices of
general shareholders’ meetings are governed by the provisions of Luxembourg law and the Company’s articles of
association. Pursuant to applicable Luxembourg law, the Company must give notice of the calling of any general
shareholders’ meeting at least 30 days prior to the date for which the meeting is being called, by publishing the
relevant convening notice in the Recueil Electronique des Sociétés et Associations (Luxembourg’s electronic official
gazette) and in a leading newspaper having general circulation in Luxembourg and by issuing a press release
informing of the calling of such meeting. In case the Company’s shares are listed on a foreign regulated market,
notices of general shareholders’ meetings shall also comply with the requirements (including as to content and
publicity) and follow the customary practices of such regulated market.
Pursuant to the Company’s articles of association, for as long as the shares or other securities of the Company are
listed on a regulated market within the European Union (as they currently are), and unless otherwise provided by
applicable law, only shareholders holding shares as of midnight, central European time, on the day that is
fourteen days prior to the day of any given general shareholders’ meeting can attend and vote at such meeting.
The board of directors may determine other conditions that must be satisfied by shareholders in order to
participate in a general shareholders’ meeting in person or by proxy, including with respect to deadlines for
submitting supporting documentation to or for the Company.
No attendance quorum is required at ordinary general shareholders’ meetings, and resolutions may be adopted by
a simple majority of the votes validly cast, irrespective of the number of shares present or represented. Unless
otherwise provided by applicable law, an extraordinary general shareholders’ meeting may not validly deliberate
on proposed amendments to the Company’s articles of association unless a quorum of at least half of the share
capital is represented at the meeting. If a quorum is not reached at the first extraordinary shareholders’ meeting, a
second extraordinary shareholders’ meeting may be convened in accordance with the Company’s articles of
association and applicable law, and such second extraordinary general shareholders’ meeting shall validly
deliberate regardless of the number of shares represented. In both cases, the Luxembourg Company Law and the
Company’s articles of association require that any resolution of an extraordinary general shareholders’ meeting as
to amendments to the Company’s articles of association be adopted by a two-thirds majority of the votes validly
cast at the meeting. If a proposed resolution consists of changing the Company’s nationality or of increasing the
shareholders’ commitments, the unanimous consent of all shareholders is required.
Cumulative voting is not permitted. The Company’s articles of association do not provide for staggered terms and
directors are elected for a maximum of one year but may be reappointed or removed at any time, with or without
cause, by the general shareholders’ meeting, by resolution passed by a simple majority vote of the shares validly
cast at the meeting. In the case of a vacancy occurring in the board of directors, the remaining directors shall have
the right to temporarily fill such vacancy with a temporary director appointed by resolution adopted with the
affirmative vote of a majority of the remaining directors; provided that the next general shareholder’s meeting
shall be called upon to ratify such appointment. The term of any such temporary director elected to fill a vacancy
shall expire at the end of the term of office of the replaced director.
The next annual general meeting of shareholders that will consider, among other matters, our consolidated
financial statements and annual accounts included in this annual report, is scheduled to be held on Tuesday, April
30, 2024, at 15:00 (Central European Time) at the Company’s registered office in Luxembourg. An extraordinary
general meeting of shareholders is scheduled to be held on the same date, immediately after the adjournment of
the annual general meeting of shareholders to decide on the cancellation of 17,779,302 shares repurchased as at
the end of the first tranche of the Company’s share buyback program and currently held in treasury and,
consequently, to approve a reduction of the Company’s issued share capital for $17,779,302 so as to bring the
issued share capital from $1,180,536,830 to $1,162,757,528, represented by 1,162,757,528 shares with a
nominal value of $1,00 each, and to approve a corresponding amendment of the first paragraph of article 5
“Share Capital” of the Company’s articles of association to reflect such resolutions.
The articles of association provide that annual general shareholders’ meetings shall meet in Luxembourg within six
months from the end of the previous financial year at the date, place and hour indicated in the convening notice.
The rights of the shareholders attending the meetings are governed by Shareholders’ Rights Law.
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Annual Report 2023
Holders of shares deposited in fungible securities accounts have the same rights and obligations as holders of
shares recorded in the Company’s share register. However, in order to be able to participate in and vote at
shareholders’ meetings of the Company, the former must submit, prior to the relevant meeting, reasonably
satisfactory evidence to the Company as to the number of shares held on the applicable record date for such
meeting. For as long as the shares or the other securities of the Company are listed on a regulated market within
the European Union, participation in a shareholders’ general meeting shall inter alia be subject to the relevant
shareholder holding shares of the Company on the fourteenth day midnight Central European Time prior to the
meeting (unless otherwise provided for by applicable law).
Holders of ADSs only have those rights that are expressly granted to them in the deposit agreement. See “Key
Information – Risk Factors – Risks Relating to shares and ADSs – Holders of ADSs may not be able to exercise, or
may encounter difficulties in the exercise of, certain rights afforded to shareholders”. ADS holders may not attend
or directly exercise voting rights in shareholder’ meetings, but holders of record of our ADSs as of the relevant
ADS holders’ record date set for any given general shareholders’ meeting are entitled to instruct the Depositary as
to the exercise of the voting rights in respect of the shares underlying such holder’s ADSs at such meeting.
Holders of ADSs maintaining non-certificated positions must follow voting instructions given by their broker or
custodian bank.
The notices convening the annual general meeting of shareholders and an extraordinary general meeting of
shareholders scheduled to be held on April 30, 2024, the Shareholder Meeting Brochure and Proxy Statement for
the meetings, describing the procedures for attending and voting at the meetings; as well as the material required
to be submitted to shareholders in connection with the meetings will be available on the Company’s website at
https://ir.tenaris.com/investor-relations in accordance with applicable rules and regulations, and will be timely filed
by the Company with the SEC on a report on Form 6-K.
Management
Management of the Company is vested in a board of directors. For more information on the Company’s board of
directors, audit committee, senior management, and auditors, see “Directors, Senior Management and
Employees”.
Access to Corporate Records
Luxembourg law and the Company’s articles of association do not generally provide for shareholder access to
corporate records. Shareholders may inspect the annual accounts and auditors’ reports at our registered office
during the fifteen-day period prior to a general shareholders’ meeting.
Appraisal Rights
In the event the Company’s shareholders approve:
•
•
•
•
•
•
the delisting of the shares from all stock exchanges where the shares are listed at that time;
a merger in which the Company is not the surviving entity (unless the shares or other equity securities of
such entity are listed on the New York or London stock exchanges);
a sale, lease, exchange or other disposition of all or substantially all of the Company’s assets;
an amendment of our articles of association that has the effect of materially changing the Company’s
corporate purpose;
the relocation of the Company’s domicile outside of the Grand Duchy of Luxembourg; or
amendments to the Company’s articles of association that restrict the rights of the Company’s
shareholders.
Dissenting or absent shareholders have the right to have their shares repurchased by the Company at (i) the
average market value of the shares over the 90 calendar days preceding the applicable shareholders’ meeting or
(ii) in the event that the shares are not traded on a regulated market, the amount that results from applying the
proportion of the Company’s equity that the shares being sold represent over the Company’s net worth as of the
date of the applicable shareholders’ meeting.
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Annual Report 2023
Dissenting or absent shareholders must present their claim within one month following the date of the
shareholders’ meeting and supply the Company with evidence of their shareholding at the time of such meeting.
The Company must (to the extent permitted by applicable laws and regulations and in compliance therewith)
repurchase its shares within six months following the date of the shareholders’ meeting.
If delisting from one or more, but not all, of the stock exchanges where the shares are listed is approved in the
shareholders’ meeting, only dissenting or absent shareholders with shares held through participants in the local
clearing system for that market or markets can exercise this appraisal right if:
•
•
they held the shares as of the date of the announcement by the Company of its intention to delist or as of
the date of publication of the first convening notice for the general shareholders’ meeting that approved
the delisting; and
they present their claim within one month following the date of the general shareholders’ meeting and
supply evidence of their shareholding as of the date of the Company’s announcement or the publication of
the first convening notice to the meeting.
In the event a shareholder exercises its appraisal rights, applicable Luxembourg law provisions shall apply.
Holders of ADSs may not be able to exercise, or may encounter difficulties in the exercise of, certain rights
afforded to shareholders, including appraisal rights. See “Key Information – Risk Factors – Risks Relating to shares
and ADSs – Holders of ADSs may not be able to exercise, or may encounter difficulties in the exercise of, certain
rights afforded to shareholders”.
Distribution of Assets on Winding-Up
In the event of the Company’s liquidation, dissolution or winding-up, the net assets remaining after allowing for
the payment of all debts, charges and expenses will be paid out to the holders of the shares in proportion to their
respective holdings.
Transferability and Form
The Company’s articles of association do not contain any redemption or sinking fund provisions, nor do they
impose any restrictions on the transfer of shares. The shares are issuable in registered form only.
The ownership of registered shares is evidenced by the inscription of the name of the shareholder, the number of
shares held by such shareholders and the amount paid on each share in the Company’s share register. In addition,
the Company’s shares may be held through fungible securities accounts with financial institutions or other
professional depositaries.
Shares held through fungible securities accounts may be transferred in accordance with customary procedures for
the transfer of securities in book-entry form. Shares that are not held through fungible securities accounts may be
transferred by a written statement of transfer signed by both the transferor and the transferee or their respective
duly appointed attorney-in-fact and recorded in the Company’s share register. The transfer of shares may also be
made in accordance with the provisions of Article 1690 of the Luxembourg Civil Code. As evidence of the transfer
of registered shares, the Company may also accept any correspondence or other documents evidencing the
agreement between transferor and transferee as to the transfer of registered shares.
Repurchase of Company shares
The Company may repurchase its own shares in the cases and subject to the conditions set by the Luxembourg
Company Law and, in the case of acquisitions of shares or ADSs made through a stock exchange in which shares
or ADSs are traded, with any applicable laws and regulations of such market. Please see “Purchase of Equity
Securities by the Issuer and Affiliated Purchasers” for further information on the authorization granted on June 2,
2020, by the annual general meeting of shareholders to the Company or its subsidiaries to repurchase shares of
the Company, including shares represented by ADSs, and repurchase of Company shares under the existing share
buyback program.
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Annual Report 2023
Limitation on Securities Ownership
There are no limitations currently imposed by Luxembourg law or the articles of association on the rights of the
Company’s non-resident or foreign shareholders to hold or vote the Company’s shares.
Change in Control
None of our outstanding securities has any special control rights. The Company’s articles of association do not
contain any provision that would have the effect of delaying, deferring or preventing a change in control of the
Company and that would operate only with respect to a merger, acquisition or corporate restructuring involving
the Company or any of its subsidiaries. In addition, the Company does not know of any significant agreements or
other arrangements to which the Company is a party and which take effect, alter or terminate in the event of a
change of control of the Company. There are no agreements between the Company and members of its board of
directors or employees providing for compensation if they resign or are made redundant without reason, or if
their employment ceases following a change in control of the Company.
There are no rights associated with the Company’s shares other than those described above.
Ownership Disclosure
The Company’s articles of association do not contain any provision requiring disclosure of share ownership.
However, under the Luxembourg Transparency Law investors in the Company’s securities should notify the
Company and the Luxembourg securities commission on an ongoing basis whenever the proportion of voting
rights held or controlled by any such investor reaches, exceeds or falls below any of the following thresholds: 5%,
10%, 15%, 20%, 25%, 33.33%, 50% and 66.66%. Failure to notify the Company and the Luxembourg
securities commission of the reaching or crossing of any such thresholds may result in the suspension of the
voting rights attaching to the shares exceeding the threshold which would have had to be notified.
Diversity and Inclusion
The Company’s Code of Conduct prohibits unlawful discrimination in employment relationships, granting all
people the right to apply for a position in Tenaris, or to be considered for a new position based on merit, without
arbitrary discrimination. The Company’s Human Resources Policy champions equal opportunities by ensuring that
hiring, promotion, transfer, notice periods, dialogue, rights and protection, as well as other employment decisions
are taken without regard for race, color, religious belief, gender, age, disability, national origin or sexual
orientation. Compensation and remuneration are based on each person’s duties, personal performance,
competence and behavior. Tenaris pursues a policy of inclusive corporate culture and leadership, recognizing the
range of benefits brought by embracing diversity in all its aspects. We are improving our workforce’s gender
balance, in the knowledge that a diverse workforce will contribute positively to our culture and performance.
Summary of differences with NYSE standards
As a Luxembourg company listed on the NYSE, the Bolsa Mexicana de Valores, S.A.B. de C.V. (the Mexican Stock
Exchange), and the Borsa Italiana S.p.A. (the Italian Stock Exchange), the Company is required to comply with
some, but not all, of the corporate governance standards of these exchanges. The Company, however, believes
that its corporate governance practices meet, in all material respects, the corporate governance standards that are
generally required for controlled companies by all of the exchanges on which the Company’s securities trade.
The following is a summary of the significant ways that the Company’s corporate governance practices differ from
the corporate governance standards required for foreign controlled companies by the NYSE. The Company’s
corporate governance practices may differ in non-material ways from certain other standards required by the
NYSE that are not detailed here.
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Annual Report 2023
Non-management directors’ meetings
Under NYSE standards, non-management directors must meet at regularly scheduled executive sessions without
management present and, if such group includes directors who are not independent, a meeting should be
scheduled once per year including only independent directors. Neither Luxembourg law nor the Company’s
articles of association require the holding of such meetings and the Company does not have a set policy for these
meetings. For additional information on board meetings, see “Directors, Senior Management and Employees –
Directors and Senior Management – Board of Directors”.
In addition, NYSE-listed companies are required to provide a method for interested parties to communicate
directly with non-management directors as a group. While the Company does not have such a method, it has set
up a compliance line for investors and other interested parties to communicate their concerns directly to the
members of our audit committee, all of whom are non-management, independent directors.
Audit committee composition
Under NYSE standards, listed U.S. companies are required to have an audit committee composed of independent
directors that satisfy the requirements of Rule 10A-3 promulgated under the Exchange Act. Pursuant to the
Company’s articles of association, as supplemented by the audit committee’s charter, for as long as the
Company’s shares are listed on at least one regulated market, the Company must have an audit committee
composed of at least three members, the majority of whom must qualify as independent directors (as defined in
the Company’s articles of association), provided, however, that the composition and membership of the audit
committee shall satisfy such requirements as are applicable to, and mandatory for, audit committees of issuers
such as the Company under any law, rule or regulation applicable to the Company (including, without limitation,
the applicable laws, rules and regulations of such regulated market or markets). The Company’s audit committee,
which currently consists of three members, complies with such requirements. In accordance with NYSE standards,
the Company has an audit committee entirely composed of independent directors for purposes of the Exchange
Act Rule 10A-3(b)(1). For more information on the Company’s audit committee see “Directors, Senior
Management and Employees– Board Practices – Audit Committee”.
Under NYSE standards, all audit committee members of listed U.S. companies are required to be financially literate
or must acquire such financial knowledge within a reasonable period and at least one of its members shall have
experience in accounting or financial administration. In addition, if a member of the audit committee is
simultaneously a member of the audit committee of more than three public companies, and the listed company
does not limit the number of audit committees on which its members may serve, then in each case the board
must determine whether the simultaneous service would prevent such member from effectively serving on the
listed company’s audit committee and shall publicly disclose its decision. Luxembourg law provisions on audit
committee membership require only that at least one member of the audit committee have competence in
accounting or auditing matters. The board of directors of the Company has determined that Ms. Tiuba, the
committee’s chairperson, qualifies as “audit committee financial expert” under applicable SEC rules and has
competence in accounting or auditing matters, as required by applicable Luxembourg law. In addition, the
membership of the audit committee as a whole has sufficient relevant knowledge of the business and financial
experience to properly discharge its functions. The audit committee has the authority, from time to time and as it
deems necessary, to engage persons that meet all of the attributes of a financial expert as consultants. See “Audit
Committee Financial Expert”.
Standards for evaluating director independence
Under NYSE standards, the board is required, on a case-by-case basis, to express an opinion with regard to the
independence or lack of independence of each individual director. Neither Luxembourg law nor the Company’s
articles of association requires that the board of directors express such an opinion. In addition, the definition of
“independent” under the NYSE rules differs in some non-material respects from the definition contained in the
Company’s articles of association. For more information on the Company’s independent directors and the
definition of “independent” under the Company’s articles of association see “Directors, Senior Management and
Employees – Directors and Senior Management – Board of Directors” and “Directors, Senior Management and
Employees – Board Practices – Audit Committee”.
125
Annual Report 2023
Audit committee responsibilities
Pursuant to the Company’s articles of association, the audit committee shall assist the board of directors in
fulfilling its oversight responsibilities relating to the integrity of its consolidated financial statements, the
effectiveness of its systems of internal control, risk management and internal audit over financial reporting and
the independence and performance of the external auditors. The audit committee is required to review and,
where applicable, approve material transactions between the Company or its subsidiaries and related parties and
also perform the other duties entrusted to it by the board. The NYSE requires certain matters to be set forth in the
audit committee charter of U.S. listed companies.
The Company’s audit committee charter provides for many of the responsibilities that are expected from such
bodies under the NYSE standard and in accordance with applicable Luxembourg law, including the Audit Reform
Law; however, due to the Company’s equity structure and holding company nature, the charter does not contain
all such responsibilities, including provisions related to procedures for the receipt and treatment of complaints
(although the Company has established such procedures), funding for payment of administrative expenses and
compensation to advisors (although the audit committee has the authority to engage outside advisors), setting
hiring policies for employees or former employees of external auditors, and an annual performance evaluation of
the audit committee. For more information on the Company’s audit committee see “Directors, Senior
Management and Employees – Board Practices – Audit Committee”.
Standards for approval of related-party transactions
The Company is subject to Luxembourg laws governing approval and disclosure of material related party
transactions, including the Shareholders’ Rights Law; and the Company’s articles of association and the Audit
Committee charter require the Audit Committee to review material transactions with related parties to determine
whether their terms are consistent with the interests of the Company and its shareholders and with market
conditions. In addition, recently amended NYSE standard on related-party transactions requires all NYSE-listed
companies’ audit committees (or another independent body of the board of directors) to conduct a reasonable
prior review and oversight of all related party transactions for potential conflicts of interest and to prohibit such a
transaction if it determines it to be inconsistent with the interests of the company and its shareholders. The rule
defines the term “related party transaction” by reference to the disclosure requirements for annual reports under
the Exchange Act. The materiality threshold applicable to foreign private issuers differs to the one applicable to
U.S companies. For further details on the approval process for related party transactions, see “Directors, Senior
Management and Employees – Board Practices – Audit Committee”.
Shareholder voting on equity compensation plans
Under NYSE standards, shareholders must be given the opportunity to vote on equity-compensation plans and
material revisions thereto, except for employment inducement awards, certain grants, plans and amendments in
the context of mergers and acquisitions, and certain specific types of plans. The Company does not currently offer
equity-based compensation to its directors, senior management or employees, and therefore does not have a
policy on this matter. For more information on directors’ compensation see “Directors, Senior Management and
Employees – Compensation”.
The Shareholders’ Rights Law requires the Company to adopt a Compensation Policy setting forth the principles
and guidelines for purposes of determining the compensation payable to the members of the Company’s board
of directors and the managing director or chief executive officer. Such Compensation Policy must be submitted to
the non-binding vote of the shareholders. In addition, the Shareholders’ Rights Law provides that the Company
must prepare an annual report describing the compensation paid to directors and the chief executive officer for
the performance of their duties and submit such report to the shareholders for approval. The Compensation Policy
and Compensation Report must be available on the Company’s website. For more information on the
Compensation Policy and the 2023 Compensation Report see “Directors, Senior Management and Employees –
Compensation”.
Disclosure of corporate governance guidelines
NYSE-listed companies must adopt and disclose corporate governance guidelines. Neither Luxembourg law nor
the Company’s articles of association require the adoption or disclosure of corporate governance guidelines. The
Company’s board of directors follows corporate governance guidelines consistent with its equity structure and
holding company nature, but the Company has not codified them and therefore does not disclose them on its
website.
126
Annual Report 2023
Code of business conduct and ethics
Under NYSE standards, listed companies must adopt and disclose a code of business conduct and ethics for
directors, officers and employees, and promptly disclose any waivers of the code for directors or executive officers.
Neither Luxembourg law nor the Company’s articles of association require the adoption or disclosure of such a
code of conduct. The Company, however, has adopted a code of conduct that applies to all directors, officers and
employees that is posted on its website and which complies with the NYSE’s requirements, except that it does not
require the disclosure of waivers of the code for directors and officers. In addition, it has adopted a supplementary
code of ethics for senior financial officers, which is also posted on our website. See “Code of Ethics”.
Chief Executive Officer certification
A chief executive officer of a U.S. company listed on the NYSE must annually certify that he or she is not aware of
any violation by the company of NYSE corporate governance standards. In accordance with NYSE rules applicable
to foreign private issuers, the Company’s chief executive officer is not required to provide the NYSE with this
annual compliance certification. However, in accordance with NYSE rules applicable to all listed companies, the
Company’s chief executive officer must promptly notify the NYSE in writing after any of our executive officers
becomes aware of any noncompliance with any applicable provision of the NYSE’s corporate governance
standards. In addition, the Company must submit an executed written affirmation annually and an interim written
affirmation upon the occurrence of any of the events listed in the foreign private issuer interim written affirmation
form by the NYSE.
127
Annual Report 2023
Cybersecurity
Risk Management, Strategy and Governance
Under the Company’s articles of association, as supplemented by the audit committee’s charter, the audit
committee assists the board of directors in fulfilling its oversight responsibilities relating to the effectiveness of the
Company’s systems of internal control, risk management and internal audit over financial reporting. In addition,
the Company has established a management-level Critical Risk Committee (“CRC”) that assists the Company’s
board of directors, the audit committee and the chief executive officer in connection with the monitoring,
assessment and review of risks to which Tenaris is exposed and in the oversight of the risk management
framework and processes, with a focus on critical risks (including accidents, cybersecurity and obsolescence,
commercial execution, environmental, health and safety and regulatory risks), the development of mitigating
actions, and the monitoring of action plans. The CRC, which comprises several senior executives, risk assurance
manager and general counsel, periodically reports to the Company’s board of directors, the audit committee and
the chief executive officer on its activities. For more information on the audit committee and CRC, see “Key
Information – Risk Factors – Risks Relating to Our Business and Industry – Cyberattacks could have a material
adverse impact on our business and results of operations”.
In particular, with respect to cybersecurity risks, Tenaris has adopted a “Cybersecurity Risk Management
Methodology”, which sets forth a procedure to monitor, identify, communicate, assess the impact and likelihood
and report actual or potential risks affecting Tenaris’s information systems, including platform, networking and
systems vulnerabilities, processes, sensitive information leak or loss. The objective of our Cybersecurity Risk
Management Methodology is to reduce, accept, transfer, or avoid the effects of such risks thereby reducing
accidents, harm, losses, disruption to services, or other negative impacts. Our risk assessment methodology
considers the potential impact of cybersecurity risks with respect to continuity of operations, information security
(including confidentiality, integrity and availability), financial performance, compliance or reputational effects, and
health, safety and environment damages. In addition, the adopted methodology considers the probability of
occurrence of each event based on factors that vary according to specific risks. A Cybersecurity Risk Catalog is
used to register detected risks, document risk assessments, and adopt appropriate action plans and reporting
measures. If deemed appropriate (for example, when specific knowledge is required) specialized consultants may
be engaged in connection with cybersecurity risk processes.
Tenaris has adopted certain other cybersecurity procedures that complement the above-mentioned Cybersecurity
Risk Management Methodology and seek to effectively manage cybersecurity incidents by analyzing potential
impacts, containing the attack, eradicating the threat, and recovering from the incident, instruct users of Tenaris’s
information systems on how to respond to cybersecurity incidents involving or affecting Tenaris IT resources or
devices through which users may access any Tenaris’s IT systems; and provide instructions and best practices to
Tenaris’s personnel with system administrator’s roles in connection with cybersecurity incidents prevention,
detection and response.
Tenaris has also adopted a “Ransomware Crisis Management Procedure” setting forth the procedure to timely
and adequately respond to a ransomware incident. In addition, because a cybersecurity incident may escalate into
a major company crisis, “Tenaris’s Crisis Management Procedure” is triggered and applied when certain events
signal potential material impacts.
Tenaris’s policies, processes and procedures established to detect and manage cybersecurity risks are monitored
and coordinated by a team of experienced and recognized professionals, including a chief information security
officer, a cybersecurity risk management director and a cybersecurity and security architecture director, with an
average of more than 25 years of experience in cybersecurity and information technology fields. The chief
information security officer periodically reports on its activities to the CRC.
During 2023, no risks from cybersecurity threats, including as a result of any previous cybersecurity incidents, lead
to known breaches of our business-critical IT systems and, as such, have not materially affected, or are reasonably
likely to materially affect, Tenaris, including its business strategy, results of operations, or financial condition.
Tenaris has adopted cyber-resilience standards as part of its cybersecurity strategy and cyber capabilities. For
example, a massive cyberattack tabletop simulation exercise was carried out in 2023 with Tenaris’s top
management, showing the Company’s strong commitment to cybersecurity issues, particularly associated risks,
potential impacts and action plans.
128
Annual Report 2023
For more information on cybersecurity risks, see “Key Information – Risk Factors – Risks Relating to Our Business
and Industry – Cyberattacks could have a material adverse impact on our business and results of operations”.
129
Annual Report 2023
NON-FINANCIAL INFORMATION
The non-financial information required by article 1730-1 of the Luxembourg Company Law and articles 68 and
68bis of the Luxembourg law of December 19, 2002 on the commercial and companies register and on the
accounting records and annual accounts and undertakings, as amended, as well as the information required
pursuant to Article 8 of Regulation (EU) 2020/852 of the European Parliament and of the Council, supplemented
by Commission Delegated Regulation (EU) 2021/2139 of 4 June 2021 and Commission Delegated Regulation (EU)
2021/2178 of 6 July 2021, has been published in a separate report, the “2023 Sustainability Report”, dated as of
the date of this annual report and available at our website: https://ir.tenaris.com/financial-and-sustainability-
reports/reports
130
FINANCIAL STATEMENTS
Consolidated Financial Statements
CONSOLIDATED
FINANCIAL STATEMENTS
For the years ended 2023, 2022 and 2021
TENARIS S.A.
26, Boulevard Royal - 4th Floor
L-2449 - Luxembourg
R.C.S. Luxembourg: B 85203
Audit report
To the Shareholders of
TENARIS S.A.
Report on the audit of the consolidated financial statements
Our opinion
In our opinion, the accompanying consolidated financial statements give a true and fair view of the
consolidated financial position of TENARIS S.A. (the “Company”) and its subsidiaries (the “Group”) as
at 31 December 2023, and of its consolidated financial performance and its consolidated cash flows for
the year then ended in accordance with IFRS Accounting Standards as as issued by the International
Accounting Standards Board (IASB) and in accordance with IFRS Accounting Standards as adopted by
the European Union.
Our opinion is consistent with our additional report to the Audit Committee of the Company’s Board of
Directors (the “Audit Committee”).
What we have audited
The Group’s consolidated financial statements comprise:
•
•
•
•
•
•
the consolidated statement of financial position as at 31 December 2023;
the consolidated income statement for the year then ended;
the consolidated statement of comprehensive income for the year then ended;
the consolidated statement of changes in equity for the year then ended;
the consolidated statement of cash flows for the year then ended; and
the notes to the consolidated financial statements, including material accounting policy information
and other explanatory information.
Basis for opinion
We conducted our audit in accordance with the EU Regulation No 537/2014, the Law of 23 July 2016
on the audit profession (Law of 23 July 2016) and with International Standards on Auditing (ISAs) as
issued by the International Auditing and Assurance Standards Board (IAASB) and as adopted for
Luxembourg by the “Commission de Surveillance du Secteur Financier” (CSSF). Our responsibilities
under the EU Regulation No 537/2014, the Law of 23 July 2016 and ISAs as adopted for Luxembourg
by the CSSF are further described in the “Responsibilities of the “Réviseur d’entreprises agréé” for the
audit of the consolidated financial statements” section of our report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our opinion.
We are independent of the Group in accordance with the International Code of Ethics for Professional
Accountants, including International Independence Standards, issued by the International Ethics
Standards Board for Accountants (IESBA Code) as adopted for Luxembourg by the CSSF together with
the ethical requirements that are relevant to our audit of the consolidated financial statements. We have
fulfilled our other ethical responsibilities under those ethical requirements.
PricewaterhouseCoopers, Société coopérative, 2 rue Gerhard Mercator, B.P. 1443, L-1014 Luxembourg
T : +352 494848 1, F : +352 494848 2900, www.pwc.lu
Cabinet de révision agréé. Expert-comptable (autorisation gouvernementale n°10028256)
R.C.S. Luxembourg B 65 477 - TVA LU25482518
To the best of our knowledge and belief, we declare that we have not provided non-audit services that
are prohibited under Article 5(1) of the EU Regulation No 537/2014.
The non-audit services that we have provided to the Company and its controlled undertakings, if
applicable, for the year ended 31 December 2023, are disclosed in Note 32 to the consolidated financial
statements.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our
audit of the consolidated financial statements of the current period. These matters were addressed in
the context of our audit of the consolidated financial statements as a whole, and in forming our opinion
thereon, and we do not provide a separate opinion on these matters.
Key audit matter
How our audit addressed the key audit matter
Income taxes - Recognition and recoverability of
deferred tax assets on tax losses related to the
Company's subsidiary in Luxembourg
The Company’s deferred tax assets amount to
1,051.4 million USD as at 31 December 2023, of
which 550.3 million USD were recognized in
2023 on tax losses available at its Luxembourg
subsidiary.
Deferred tax assets related to tax losses are
recognized to the extent it is probable that future
taxable profits will be available, against which
such losses can be utilized. Management applied
significant judgment in assessing the likelihood
that future taxable profits will be available. We
focused on this area due to the size of the
balance, the significant professional judgment
and the audit effort required.
The disclosures related
included
consolidated financial statements.
in Notes
to this matter are
the
II.O and VI.22
to
We evaluated and tested the effectiveness of
controls relating to the management’s recognition
and recoverability of deferred tax assets on tax
losses related to the Company’s subsidiary in
Luxembourg, including controls over management’s
estimation of future taxable profit.
We tested the completeness and accuracy of
underlying data used in measuring and recognizing
deferred tax assets on tax losses and tested the
mathematical accuracy of the model used in
management’s assessment.
We also assessed
reasonableness of
the
management’s projections of future taxable profits
evaluating whether
the assumptions used by
management were reasonable considering the
current and past taxable profits and the consistency
with external market and industry data.
We finally assessed the adequacy of the disclosures
in the consolidated financial statements.
Other information
The Board of Directors is responsible for the other information. The other information comprises the
information stated in the annual report including the consolidated management report and the Corporate
Governance Statement but does not include the consolidated financial statements and our audit report
thereon.
Our opinion on the consolidated financial statements does not cover the other information and we do
not express any form of assurance conclusion thereon.
133
In connection with our audit of the consolidated financial statements, our responsibility is to read the
other information identified above and, in doing so, consider whether the other information is materially
inconsistent with the consolidated financial statements or our knowledge obtained in the audit, or
otherwise appears to be materially misstated. If, based on the work we have performed, we conclude
that there is a material misstatement of this other information, we are required to report that fact. We
have nothing to report in this regard.
Responsibilities of the Board of Directors and those charged with governance for the
consolidated financial statements
The Board of Directors is responsible for the preparation and fair presentation of the consolidated
financial statements in accordance with IFRS Accounting Standards as issued by the International
Accounting Standards Board (IASB) and in accordance with IFRS Accounting Standards as adopted by
the European Union, and for such internal control as the Board of Directors determines is necessary to
enable the preparation of consolidated financial statements that are free from material misstatement,
whether due to fraud or error.
In preparing the consolidated financial statements, the Board of Directors is responsible for assessing
the Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless the Board of Directors either intends
to liquidate the Group or to cease operations, or has no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Group’s financial reporting process.
The Board of Directors is responsible for presenting and marking up the consolidated financial
statements in compliance with the requirements set out in the Delegated Regulation 2019/815 on
European Single Electronic Format (“ESEF Regulation”).
Responsibilities of the “Réviseur d’entreprises agréé” for the audit of the consolidated financial
statements
The objectives of our audit are to obtain reasonable assurance about whether the consolidated financial
statements as a whole are free from material misstatement, whether due to fraud or error, and to issue
an audit report that includes our opinion. Reasonable assurance is a high level of assurance, but is not
a guarantee that an audit conducted in accordance with the EU Regulation No 537/2014, the Law of
23 July 2016 and with ISAs as issued by the IAASB and as adopted for Luxembourg by the CSSF will
always detect a material misstatement when it exists. Misstatements can arise from fraud or error and
are considered material if, individually or in the aggregate, they could reasonably be expected to
influence the economic decisions of users taken on the basis of these consolidated financial statements.
As part of an audit in accordance with the EU Regulation No 537/2014, the Law of 23 July 2016 and
with ISAs as adopted for Luxembourg by the CSSF, we exercise professional judgment and maintain
professional scepticism throughout the audit. We also:
•
identify and assess the risks of material misstatement of the consolidated financial statements,
whether due to fraud or error, design and perform audit procedures responsive to those risks, and
obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of
not detecting a material misstatement resulting from fraud is higher than for one resulting from error,
as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of
internal control;
134
• obtain an understanding of internal control relevant to the audit in order to design audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Group’s internal control;
• evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the Board of Directors;
• conclude on the appropriateness of the Board of Directors’ use of the going concern basis of
accounting and, based on the audit evidence obtained, whether a material uncertainty exists related
to events or conditions that may cast significant doubt on the Group’s ability to continue as a going
concern. If we conclude that a material uncertainty exists, we are required to draw attention in our
audit report to the related disclosures in the consolidated financial statements or, if such disclosures
are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up
to the date of our audit report. However, future events or conditions may cause the Group to cease
to continue as a going concern;
• evaluate the overall presentation, structure and content of the consolidated financial statements,
including the disclosures, and whether the consolidated financial statements represent the underlying
transactions and events in a manner that achieves fair presentation;
• obtain sufficient appropriate audit evidence regarding the financial information of the entities and
business activities within the Group to express an opinion on the consolidated financial statements.
We are responsible for the direction, supervision and performance of the Group audit. We remain
solely responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned
scope and timing of the audit and significant audit findings, including any significant deficiencies in
internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant
ethical requirements regarding independence, and communicate to them all relationships and other
matters that may reasonably be thought to bear on our independence, and where applicable, actions
taken to eliminate threats or safeguards applied.
From the matters communicated with those charged with governance, we determine those matters that
were of most significance in the audit of the consolidated financial statements of the current period and
are therefore the key audit matters. We describe these matters in our audit report unless law or
regulation precludes public disclosure about the matter.
We assess whether the consolidated financial statements have been prepared, in all material respects,
in compliance with the requirements laid down in the ESEF Regulation.
135
Report on other legal and regulatory requirements
The consolidated management report is consistent with the consolidated financial statements and has
been prepared in accordance with applicable legal requirements.
The Corporate Governance Statement is included in the consolidated management report. The
information required by Article 68ter Paragraph (1) Letters c) and d) of the Law of 19 December 2002
on the commercial and companies register and on the accounting records and annual accounts of
undertakings, as amended, is consistent with the consolidated financial statements and has been
prepared in accordance with applicable legal requirements.
We have been appointed as “Réviseur d’Entreprises Agréé” by the General Meeting of the Shareholders
on 3 May 2023 and the duration of our uninterrupted engagement, including previous renewals and
reappointments, is 22 years.
We have checked the compliance of the consolidated financial statements of the Group as at
31 December 2023 with relevant statutory requirements set out in the ESEF Regulation that are
applicable to consolidated financial statements.
For the Group it relates to the requirement that:
•
•
the consolidated financial statements are prepared in a valid XHTML format;
the XBRL markup of the consolidated financial statements uses the core taxonomy and the common
rules on markups specified in the ESEF Regulation.
In our opinion, the consolidated financial statements of the Group as at 31 December 2023 have
been prepared, in all material respects, in compliance with the requirements laid down in the
ESEF Regulation.
PricewaterhouseCoopers, Société coopérative
Represented by
Luxembourg, 22 March 2024
Gilles Vanderweyen
@esig
136
Consolidated Financial Statements
For the years ended 2023, 2022 and 2021 - all amounts in thousands of U.S. dollars, unless otherwise stated
CONSOLIDATED INCOME STATEMENTS
Year ended December 31,
2022
2021
2023
-
14,868,860 11,762,526
(7,087,739)
(8,668,915)
6,199,945
4,674,787
(1,634,575)
(1,919,307)
(76,725)
104,497
(104,709)
2,963,275
80,020
(45,940)
(40,120)
53,043
(17,273)
4,316,408
213,474
(106,862)
114,365
6,521,207
(4,611,602)
1,909,605
(1,206,569)
(57,075)
68,245
(6,697)
707,509
38,048
(23,677)
8,295
4,537,385
95,404
4,632,789
(674,956)
3,957,833
2,957,235
208,702
3,165,937
(617,236)
2,548,701
730,175
512,591
1,242,766
(189,448)
1,053,318
3,918,065
39,768
3,957,833
2,553,280
(4,579)
2,548,701
1,100,191
(46,873)
1,053,318
1,178,738
1,180,537
1,180,537
3.32
6.65
2.16
4.33
0.93
1.86
Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Impairment charge
Other operating income
Other operating expenses
Operating income
Finance income
Finance cost
Other financial results
Income before equity in earnings of non-consolidated companies and income
tax
Equity in earnings of non-consolidated companies
Income before income tax
Income tax
Income for the year
Notes
1
2
3
5
6
6
7
7
7
8
9
Attributable to:
Shareholders' equity
Non-controlling interests
Earnings per share attributable to shareholders' equity during the year:
Weighted average number of outstanding ordinary shares (thousands)
Basic and diluted earnings per share (U.S. dollars per share)
Basic and diluted earnings per ADS (U.S. dollars per ADS) (*)
(*) Each ADS equals two shares.
The accompanying notes are an integral part of these Consolidated Financial Statements.
137
Consolidated Financial Statements
For the years ended 2023, 2022 and 2021 - all amounts in thousands of U.S. dollars, unless otherwise stated
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Year ended December 31,
2022
2021
2023
Income for the year
Items that may be subsequently reclassified to profit or loss:
Currency translation adjustment
Reclassification of currency translation adjustment reserve (*)
Change in value of cash flow hedges and instruments at fair value (**)
Income tax relating to components of other comprehensive income
From participation in non-consolidated companies:
- Currency translation adjustment
- Changes in the value of cash flow hedges and instruments at fair value
Items that will not be reclassified to profit or loss:
Remeasurements of post-employment benefit obligations
Income tax on items that will not be reclassified
Remeasurements of post-employment benefit obligations of non-consolidated
companies
Other comprehensive (loss) for the year
Total comprehensive income for the year
Attributable to:
Shareholders' equity
Non-controlling interests
3,957,833
2,548,701
1,053,318
38,937
(878)
(112,433)
(24,591)
110,801
(47,963)
(36,127)
(23,710)
(71,252)
(5,186)
-
7,336
1,435
(91,377)
(6,816)
2,204
13,577
(2,673)
(4,083)
(8,695)
(44,822)
3,913,011
3,588
14,492
(76,885)
2,471,816
(81,953)
-
(1,178)
(1,511)
(11,085)
13
(95,714)
14,648
(5,137)
3,829
13,340
(82,374)
970,944
3,873,213
39,798
3,913,011
2,476,373
(4,557)
2,471,816
1,016,434
(45,490)
970,944
(*) During 2022 as a result of NKKTubes’ definitive cease of operations, the currency translation adjustment reserve belonging to the shareholders was
reclassified with impact in the income statement. For more information see note 36 “Termination of NKKTubes joint venture”.
(**) Mainly related to the change in the fair value of U.S. dollar-denominated Argentine bonds. For more information see note 29.
The accompanying notes are an integral part of these Consolidated Financial Statements.
138
Consolidated Financial Statements
For the years ended 2023, 2022 and 2021 - all amounts in thousands of U.S. dollars, unless otherwise stated
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
At December 31, 2023
At December 31, 2022
ASSETS
Non-current assets
Property, plant and equipment, net
Intangible assets, net
Right-of-use assets, net
Investments in non-consolidated companies
Other investments NC
Deferred tax assets
Receivables, net
Current assets
Inventories, net
Receivables and prepayments, net
Current tax assets
Trade receivables, net
Derivative financial instruments CA
Other investments C
Cash and cash equivalents
Total assets
EQUITY
Shareholders' equity
Non-controlling interests
Total equity
LIABILITIES
Non-current liabilities
Borrowings
Lease liabilities
Derivative financial instruments NCL
Deferred tax liabilities
Other liabilities
Provisions
Current liabilities
Borrowings
Lease liabilities
Derivative financial instruments CL
Current tax liabilities
Other liabilities
Provisions
Customer advances
Trade payables
Total liabilities
Total equity and liabilities
Notes
11
12
13
14
20
22
15
16
17
18
19
26
20
20
6,078,179
1,377,110
132,138
1,608,804
405,631
789,615
185,959
3,921,097
228,819
256,401
2,480,889
9,801
1,969,631
1,637,821
21
13
26
22
23 (i)
24
21
13
26
18
23 (ii)
25 (ii)
48,304
96,598
255
631,605
271,268
101,453
535,133
37,835
10,895
488,277
422,645
35,959
263,664
1,107,567
5,556,263
1,332,508
111,741
1,540,646
119,902
208,870
211,720
9,081,650
3,986,929
183,811
243,136
2,493,940
30,805
438,448
1,091,527
8,468,596
17,550,246
13,905,709
128,728
14,034,437
46,433
83,616
-
269,069
230,142
98,126
682,329
28,561
7,127
376,240
260,614
11,185
242,910
1,179,457
727,386
2,788,423
3,515,809
17,550,246
10,577,436
10,504,459
21,081,895
16,842,972
187,465
17,030,437
1,149,483
2,901,975
4,051,458
21,081,895
Contingencies, commitments and restrictions on the distribution of profits are disclosed in note 27 to these Consolidated Financial Statements.
The accompanying notes are an integral part of these Consolidated Financial Statements.
139
Consolidated Financial Statements
For the years ended 2023, 2022 and 2021 - all amounts in thousands of U.S. dollars, unless otherwise stated
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
Share
Capital (1)
Treasury
Shares (2)
Legal
Reserves
Share
Premium
Currency
Translation
Adjustment
Other
Reserves (3)
Retained
Earnings (4)
Total
Non-
controlling
interests
Total
Shareholders' equity
Balance at December 31, 2022
Income for the year
Currency translation adjustment
Reclassification of currency translation adjustment reserve
Remeasurements of post-employment benefit obligations, net of
taxes
Change in value of instruments at fair value through other
comprehensive income and cash flow hedges, net of taxes (5)
From other comprehensive income of non-consolidated companies
Other comprehensive (loss) income for the year
Total comprehensive income (loss) for the year
Repurchase of own shares (2)
Shares to be settled under buyback program (6)
Acquisition and other changes in non-controlling interests (7)
Dividends paid in cash
Balance at December 31, 2023
1,180,537
-
-
-
-
-
-
-
-
-
-
-
-
1,180,537
-
-
-
-
-
118,054
-
-
-
609,733
-
-
-
(1,138,681)
-
38,587
(878)
(325,572)
-
-
-
13,461,638 13,905,709
3,918,065
38,587
(878)
3,918,065
-
-
128,728 14,034,437
3,957,833
38,937
(878)
39,768
350
-
-
-
-
(3,096)
(1,196)
(4,292)
(320)
(4,612)
-
-
-
-
(213,739)
-
-
-
(213,739)
-
-
-
-
-
-
-
-
118,054
-
-
-
-
-
-
-
-
609,733
-
110,801
148,510
148,510
-
-
-
-
(990,171)
(137,024)
(52,046)
(192,166)
(192,166)
-
(86,240)
-
-
(603,978)
-
-
(1,196)
3,916,869
-
-
540
(636,511)
(137,024)
58,755
(44,852)
3,873,213
(213,739)
(86,240)
540
(636,511)
16,742,536 16,842,972
(137,024)
-
58,755
-
(44,822)
30
3,913,011
39,798
(213,739)
-
(86,240)
-
38,446
37,906
(18,967)
(655,478)
187,465 17,030,437
(1) The Company has an authorized share capital of a single class of 2.5 billion shares having a nominal value of $1.00 per share. As of December 31, 2023 there were 1,180,536,830 shares issued. All issued shares are fully
paid.
(2) As of December 31, 2023, the Company held 12,648,091 shares as treasury shares. For more information see note 37.
(3) Other reserves include mainly the result of transactions with non-controlling interests that do not result in a loss of control, the remeasurement of post-employment benefit obligations, the changes in value of cash flow
hedges and the changes in financial instruments measured at fair value through other comprehensive income.
(4) The restrictions on the distribution of profits and payment of dividends according to Luxembourg Law are disclosed in note 27 (iii) to these Consolidated Financial Statements.
(5) Mainly related to the change in the fair value of U.S. dollar-denominated Argentine bonds. For more information see note 29.
(6) For more information see note 37.
(7) Mainly related to Global Pipe Company (“GPC”) acquisition. For more information see note 34.
The accompanying notes are an integral part of these Consolidated Financial Statements.
140
Consolidated Financial Statements
For the years ended 2023, 2022 and 2021 - all amounts in thousands of U.S. dollars, unless otherwise stated
Balance at December 31, 2021
Income (loss) for the year
Currency translation adjustment
Reclassification of currency translation adjustment reserve (3)
Remeasurements of post-employment benefit obligations, net of taxes
Change in value of instruments at fair value through other comprehensive
income and cash flow hedges, net of taxes
From other comprehensive income of non-consolidated companies
Other comprehensive (loss) income for the year
Total comprehensive income (loss) for the year
Acquisition and other changes in non-controlling interests
Dividends paid in cash
Balance at December 31, 2022
Balance at December 31, 2020
Income (loss) for the year
Currency translation adjustment
Remeasurements of post-employment benefit obligations, net of taxes
Change in value of instruments at fair value through other comprehensive
income and cash flow hedges, net of taxes
From other comprehensive income of non-consolidated companies
Other comprehensive (loss) income for the year
Total comprehensive income (loss) for the year
Acquisition and other changes in non-controlling interests (4)
Dividends paid in cash
Balance at December 31, 2021
Shareholders' equity
Share
Capital (1)
Legal
Reserves
Share
Premium
1,180,537
-
-
-
-
-
-
-
-
-
-
1,180,537
118,054
-
-
-
-
-
-
-
-
-
-
118,054
609,733
-
-
-
-
-
-
-
-
-
-
609,733
Currency
Translation
Adjustment
(1,051,133)
-
(23,632)
(71,252)
-
-
7,336
(87,548)
(87,548)
-
-
(1,138,681)
Other
Reserves (2)
Retained
Earnings
Total
Non-controlling
interests
(336,200)
-
-
-
10,519
(4,914)
5,023
10,628
10,628
-
-
(325,572)
11,439,587 11,960,578
2,553,280
(23,632)
(71,252)
10,532
2,553,280
-
-
13
-
-
13
2,553,293
-
(531,242)
(4,914)
12,359
(76,907)
2,476,373
-
(531,242)
13,461,638 13,905,709
145,124
(4,579)
(78)
-
372
(272)
-
22
(4,557)
(1,407)
(10,432)
128,728
Shareholders' equity
Share
Capital (1)
Legal
Reserves
Share
Premium
1,180,537
-
-
-
-
-
-
-
-
-
1,180,537
118,054
-
-
-
-
-
-
-
-
-
118,054
609,733
-
-
-
-
-
-
-
-
-
609,733
Currency
Translation
Adjustment
(958,374)
-
(81,674)
-
-
(11,085)
(92,759)
(92,759)
-
-
(1,051,133)
Other
Reserves (2)
Retained
Earnings
Total
Non-controlling
interests
(345,217)
-
-
9,813
(4,638)
3,842
9,017
9,017
-
-
(336,200)
10,658,155 11,262,888
1,100,191
(81,674)
9,798
1,100,191
-
(15)
-
-
(15)
1,100,176
-
(318,744)
(4,638)
(7,243)
(83,757)
1,016,434
-
(318,744)
11,439,587 11,960,578
183,585
(46,873)
(279)
(287)
1,949
-
1,383
(45,490)
10,384
(3,355)
145,124
Total
12,105,702
2,548,701
(23,710)
(71,252)
10,904
(5,186)
12,359
(76,885)
2,471,816
(1,407)
(541,674)
14,034,437
Total
11,446,473
1,053,318
(81,953)
9,511
(2,689)
(7,243)
(82,374)
970,944
10,384
(322,099)
12,105,702
(1) The Company has an authorized share capital of a single class of 2.5 billion shares having a nominal value of $1.00 per share. As of December 31, 2022 and 2021 there were 1,180,536,830 shares issued. All issued shares are fully paid.
(2) Other reserves include mainly the result of transactions with non-controlling interests that do not result in a loss of control, the remeasurement of post-employment benefit obligations, the changes in value of cash flow hedges and the changes in
financial instruments measured at fair value through other comprehensive income.
(3) Related to NKKTubes’ cease of operations. For more information see note 36 “Termination of NKKTubes joint venture”.
(4) Mainly related to the agreement for the construction of Tenaris Baogang Baotou Steel Pipes Ltd.
The accompanying notes are an integral part of these Consolidated Financial Statements.
141
Consolidated Financial Statements
For the years ended 2023, 2022 and 2021 - all amounts in thousands of U.S. dollars, unless otherwise stated
CONSOLIDATED STATEMENTS OF CASH FLOWS
Cash flows from operating activities
Income for the year
Adjustments for:
Depreciation and amortization
Impairment charge
Income tax accruals less payments
Equity in earnings of non-consolidated companies
Interest accruals less payments, net
Changes in provisions
Reclassification of currency translation adjustment reserve (*)
Result of sale of subsidiaries
Changes in working capital (**)
Others, including net exchange differences
Net cash provided by operating activities
Cash flows from investing activities
Capital expenditures
Changes in advance to suppliers of property, plant and equipment
Proceeds from sale of subsidiaries, net of cash
Acquisition of subsidiaries, net of cash acquired (***)
Investment in companies under cost method
Additions to associated companies
Loan to joint-ventures
Proceeds from disposal of property, plant and equipment and
intangible assets
Dividends received from non-consolidated companies
Changes in investments in securities
Net cash (used in) provided by investing activities
Cash flows from financing activities
Dividends paid
Dividends paid to non-controlling interest in subsidiaries
Changes in non-controlling interests
Acquisition of treasury shares
Payments of lease liabilities
Proceeds from borrowings
Repayments of borrowings
Net cash used in financing activities
Increase (decrease) in cash and cash equivalents
Movement in cash and cash equivalents
At the beginning of the year
Effect of exchange rate changes
Increase (decrease) in cash and cash equivalents
At December 31,
Cash and cash equivalents
Cash and bank deposits
Bank overdrafts
Notes
11, 12 &
13
5
30(ii)
8
30(iii)
24 & 25(ii)
6 & 36
6
30(i)
11 & 12
6
34
14 (b)
14 (c)
8
10
37
13
20
21
Year ended December 31,
2022
2021
2023
3,957,833
2,548,701
1,053,318
548,510
-
(143,391)
(95,404)
(53,480)
21,284
(878)
-
182,428
(21,829)
4,395,073
(619,445)
1,736
-
(265,657)
(1,126)
(22,661)
(3,754)
12,881
68,781
(1,857,272)
(2,686,517)
(636,511)
(18,967)
3,772
(213,739)
(51,492)
1,723,677
(1,931,747)
(1,125,007)
607,723
76,725
257,651
(208,702)
1,480
16,433
(71,252)
-
(2,131,245)
69,703
1,167,217
594,721
57,075
35,602
(512,591)
(11,363)
7,381
-
(6,768)
(1,071,464)
(26,836)
119,075
(378,446)
(18,901)
-
(4,082)
-
-
-
48,458
66,162
123,254
(163,555)
(239,518)
(5,075)
24,332
-
(692)
-
-
22,735
75,929
390,186
267,897
(531,242)
(10,432)
(1,407)
-
(52,396)
1,511,503
(1,094,370)
(178,344)
(318,744)
(3,355)
-
-
(48,473)
843,668
(1,121,053)
(647,957)
583,549
825,318
(260,985)
1,091,433
(58,385)
583,549
1,616,597
318,067
(51,952)
825,318
1,091,433
584,583
(5,531)
(260,985)
318,067
2023
1,637,821
(21,224)
1,616,597
At December 31,
2022
1,091,527
(94)
1,091,433
2021
318,127
(60)
318,067
(*) For 2022, related to NKKTubes’ cease of operations. For more information see note 36 “Termination of NKKTubes joint venture”.
(**) Changes in working capital do not include non-cash movements due to the variations in the exchange rates used by subsidiaries with
functional currencies different from the U.S. dollar for an amount of $(16.7) million for 2023, $4.2 million for 2022 and $25.6 million for
2021.
(***) For 2023, related to the GPC, Isoplus anticorrosion coating division, Republic Tube LLC’s OCTG pipe processing facility and Mattr’s pipe
coating business unit acquisitions. For more information see note 34.
For 2022, related to Parques Eólicos de la Buena Ventura S.A. acquisition.
The accompanying notes are an integral part of these Consolidated Financial Statements.
142
Consolidated Financial Statements
For the years ended 2023, 2022 and 2021 - all amounts in thousands of U.S. dollars, unless otherwise stated
INDEX TO THE NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
OTHER NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS
Segment information
Cost of sales
Selling, general and administrative expenses
Labor costs (included in Cost of sales and in Selling, general
and administrative expenses)
Impairment charge
Other operating income and expenses
Financial results
Equity in earnings of non-consolidated companies
Income tax
Dividends distribution
Property, plant and equipment, net
Intangible assets, net
Right-of-use assets, net and lease liabilities
Investments in non-consolidated companies
Receivables non-current
Inventories, net
Receivables and prepayments, net
Current tax assets and liabilities
Trade receivables, net
Cash and cash equivalents and other investments
Borrowings
Deferred tax assets and liabilities
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23 Other liabilities
24
25
26
Non-current allowances and provisions
Current allowances and provisions
Derivative financial instruments
Contingencies, commitments and restrictions on the
distribution of profits
Cancellation of title deed in Saudi Steel Pipe Company
27
28
29
30
31
32
33
34
35
36
37
38
39
Foreign exchange control measures in Argentina
Cash flow disclosures
Related party transactions
Principal accountant fees
Principal subsidiaries
Business combinations
Nationalization of Venezuelan subsidiaries
Termination of NKKTubes joint venture
Share buyback program
Climate change
Events after the reporting period
I
GENERAL INFORMATION
II
A
ACCOUNTING POLICIES
Basis of presentation
B Group accounting
IV
1
2
3
4
Segment information
Foreign currency translation
Property, plant and equipment
Intangible assets
C
D
E
F
G Right-of-use assets and lease liabilities
Impairment of non-financial assets
H
Other investments
I
Inventories
J
Trade and other receivables
K
L
Cash and cash equivalents
M Equity
N
O Current and deferred income tax
P
Q
R
S
T Cost of sales and other selling expenses
U
V
Employee benefits
Provisions
Trade and other payables
Revenue recognition
Earnings per share
Financial instruments
Borrowings
III
FINANCIAL RISK MANAGEMENT
A
B
C
D
Financial risk factors
Category of financial instruments and classification within
the fair value hierarchy
Fair value estimation
Accounting for derivative financial instruments and hedging
activities
143
Consolidated Financial Statements
For the years ended 2023, 2022 and 2021 - all amounts in thousands of U.S. dollars, unless otherwise stated
I. GENERAL INFORMATION
Tenaris S.A. (the “Company”) was established as a public limited liability company (société anonyme) under the
laws of the Grand-Duchy of Luxembourg on December 17, 2001. The Company holds, either directly or indirectly,
controlling interests in various subsidiaries in the steel pipe manufacturing and distribution businesses. References
in these Consolidated Financial Statements to “Tenaris” refer to the Company and its consolidated subsidiaries. A
list of the principal Company’s subsidiaries is included in note 33 to these Consolidated Financial Statements.
The Company’s shares trade on the Italian Stock Exchange and the Mexican Stock Exchange; and the Company’s
American Depositary Securities (“ADS”) trade on the New York Stock Exchange.
These Consolidated Financial Statements were approved for issuance by the Company’s Board of Directors on
February 21, 2024.
II. ACCOUNTING POLICIES
The accounting policies applied in the preparation of these Consolidated Financial Statements are set out below.
These policies have been consistently applied to all the years presented, unless otherwise stated.
A
Basis of presentation
The Consolidated Financial Statements of Tenaris have been prepared in accordance with International Financial
Reporting Standards (“IFRS" or "IFRS Accounting Standards”), as issued by the International Accounting Standards
Board (“IASB”) and in accordance with IFRS as adopted by the European Union, under the historical cost convention,
as modified by the revaluation of certain financial assets and liabilities (including derivative instruments) and plan
assets at fair value. The Consolidated Financial Statements are, unless otherwise noted, presented in thousands of
U.S. dollars (“$”).
Whenever necessary, certain comparative amounts have been reclassified to conform to changes in presentation in
the current year.
The preparation of Consolidated Financial Statements in conformity with IFRS requires management to make certain
accounting estimates and assumptions that might affect among others, the reported amounts of assets, liabilities,
contingent liabilities, revenues and expenses. Actual results may differ from these estimates. The main areas
involving material estimates or judgements are: impairment of goodwill and long-lived assets (notes II.H),
impairment in investments in associates (note II.B); income taxes including recoverability of deferred tax assets (note
II.O); obsolescence of inventory (note II.J); contingencies (note II.Q); allowance for trade receivables (note II.K); post-
employment and other long-term benefits (note II.P); business combinations (notes II.B); useful lives of property,
plant and equipment and other long-lived assets (notes II.E, II.F, II.H) and property title ownership restriction (note
IV.28). During the year there were no significant changes in the material accounting estimates and judgements.
(1)
Accounting pronouncements applicable as from January 1, 2023
Amendments to IAS 12 - International Tax Reform - Pillar Two Model Rules
In December 2021, the Organization for Economic Co-operation and Development (“OECD”) released the Pillar
Two model rules (the Global Anti-Base Erosion rules, or “GloBE”) to reform international corporate taxation.
Following Pillar Two OECD’s initiative, the European Union adopted in December 2022 a directive to impose a global
minimum taxation for multinational companies in the Union, to be effective as from 2024.
In May 2023, the IASB made narrow-scope amendments to IAS 12 setting an exception that provides relief from
the requirement to recognize and disclose deferred taxes arising from enacted or substantively enacted tax laws
that implement the Pillar Two model rules, including tax laws that implement qualified domestic minimum top-up
taxes as per described in those rules.
On December 20, 2023, the Luxembourg Parliament approved the Pillar Two law transposing the EU Pillar Two
Directive into domestic legislation. The law enters into force as from fiscal years starting on or after 31 December
2023.
144
Consolidated Financial Statements
For the years ended 2023, 2022 and 2021 - all amounts in thousands of U.S. dollars, unless otherwise stated
The Company is within the scope of the rules, and therefore will be required to calculate its GloBE effective tax rate
for each jurisdiction where it operates and will be liable to pay a top-up tax for the difference between its GloBE
effective tax rate per jurisdiction and the 15% minimum rate, as from 2024. For more information see note 9.
Other accounting pronouncements that became effective during 2023 have no material effect on the Company’s
financial condition or results of operations.
(2)
New accounting pronouncements not applicable as of December 31, 2023
Certain newly published accounting standards, amendments to accounting standards and interpretations are not
mandatory for December 31, 2023 reporting periods and have not been early adopted by the Company. These
standards, amendments or interpretations are not expected to have a material impact in the current or future
reporting periods and on foreseeable future transactions.
B
Group accounting
(1)
Subsidiaries and transactions with non-controlling interests
Subsidiaries are all entities over which Tenaris has control. Tenaris controls an entity when it is exposed to, or has
rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its
power over the entity. In some cases, the Company considers that it has the ability to affect returns through its
power over an entity even if it holds less than 50% of the shares or voting rights of the subsidiary because it is able
to prevail at all of the subsidiary’s general meetings, which in turn allows Tenaris to nominate and appoint a majority
of the subsidiary’s board of directors. Subsidiaries are fully consolidated from the date on which control is exercised
by the Company and are no longer consolidated from the date control ceases.
The acquisition method is used to account for the acquisition of subsidiaries by Tenaris. The cost of an acquisition
is measured as the fair value of the assets transferred, equity instruments issued and liabilities incurred or assumed
at the date of exchange. Acquisition-related costs are expensed as incurred. Identifiable assets acquired, liabilities
and contingent liabilities assumed in a business combination are generally measured initially at their fair values at
the acquisition date. Any non-controlling interest in the acquiree is measured either at fair value or at the non-
controlling interest’s proportionate share of the acquiree’s net identifiable assets. The excess of the aggregate of
the consideration transferred and the amount of any non-controlling interest in the acquiree over the fair value of
the identifiable net assets acquired is recorded as goodwill. If this is less than the fair value of the net assets of the
subsidiary acquired, the difference is recognized directly in the Consolidated Income Statement.
Contingent consideration is classified either as equity or as a financial liability. Amounts classified as a financial
liability are subsequently remeasured to fair value with changes in fair value recognized in profit or loss.
If the business combination is achieved in stages, the acquisition date carrying value of the acquirer’s previously
held equity interest in the acquiree is remeasured to fair value at the acquisition date. Any gains or losses arising
from such remeasurement are recognized in profit or loss.
Transactions with non-controlling interests that do not result in a loss of control are accounted as transactions with
equity owners of the Company. For purchases from non-controlling interests, the difference between any
consideration paid and the relevant share acquired of the carrying value of net assets of the subsidiary is recorded
in equity. Gains or losses on disposals to non-controlling interests are also recorded in equity.
145
Consolidated Financial Statements
For the years ended 2023, 2022 and 2021 - all amounts in thousands of U.S. dollars, unless otherwise stated
When the Company ceases to have control or significant influence, any retained interest in the entity is remeasured
to its fair value, with the change in carrying amount recognized in profit or loss. The fair value is the initial carrying
amount for the purposes of subsequently accounting for the retained interest as an associate, joint venture or
financial asset. In addition, any amounts previously recognized in other comprehensive income in respect of that
entity are accounted for as if the group had directly disposed of the related assets or liabilities. This may mean that
amounts previously recognized in other comprehensive income are reclassified to profit or loss.
Material intercompany transactions, balances and unrealized gains (losses) on transactions between Tenaris
subsidiaries have been eliminated in consolidation. However, since the functional currency of some subsidiaries is
its respective local currency, some financial gains (losses) arising from intercompany transactions are generated.
These are included in the Consolidated Income Statement under Other financial results.
(2) Non-consolidated companies
Non-consolidated companies are all entities in which Tenaris has significant influence but not control, generally
accompanying a shareholding of between 20% and 50% of the voting rights. Investments in non-consolidated
companies (associates and joint ventures) are accounted for by the equity method and are initially recognized at
cost (as defined by IAS 28, “Investments in Associates and Joint Ventures”). The Company’s investment in non-
consolidated companies includes goodwill identified in acquisition, net of any accumulated impairment loss.
Under the equity method, the investments are initially recognized at cost and adjusted thereafter to recognize
Tenaris’s share of the post-acquisition profits or losses of the investee in profit or loss, and Tenaris’s share of
movements in other comprehensive income of the investee in other comprehensive income. Dividends received or
receivable from associates and joint ventures are recognized as a reduction in the carrying amount of the investment.
If material, unrealized results on transactions between Tenaris and its non-consolidated companies are eliminated
to the extent of Tenaris’s interest in the non-consolidated companies. Unrealized losses are also eliminated unless
the transaction provides evidence of an impairment indicator of the asset transferred. Financial statements of non-
consolidated companies are adjusted where necessary to ensure consistency with IFRS.
The Company’s pro-rata share of earnings in non-consolidated companies is recorded in the Consolidated Income
Statement under Equity in earnings of non-consolidated companies. The Company’s pro-rata share of changes in
other comprehensive income is recognized in the Consolidated Statement of Comprehensive Income.
a) Ternium
At December 31, 2023, Tenaris held 11.46% in the share capital of Ternium S.A. (“Ternium”). The following factors
and circumstances evidence that Tenaris has significant influence over Ternium:
▪ both the Company and Ternium are under the indirect common control of San Faustin S.A. (“San Faustin”);
▪
four out of eight members of Ternium’s board of directors (including Ternium’s chairman) are also members
of the Company’s board of directors;
▪ under the shareholders’ agreement by and between the Company and Techint Holdings S.àr.l ("Techint"),
a wholly owned subsidiary of San Faustin and Ternium’s main shareholder, dated January 9, 2006 Techint,
is required to take actions within its power to cause (a) one of the members of Ternium’s board of directors
to be nominated by the Company and (b) any director nominated by the Company to be removed from
Ternium’s board of directors only pursuant to previous written instructions of the Company.
b) Usiminas
At December 31, 2023, Tenaris held, through its Brazilian subsidiary Confab Industrial S.A. (“Confab”), 47.5 million
ordinary shares and 1.3 million preferred shares of Usinas Siderúrgicas de Minas Gerais S.A. - Usiminas (“Usiminas”),
representing 6.76% of its shares with voting rights and 3.96% of its total share capital.
Confab’s participation in Usiminas share capital is the result of a series of acquisitions, the first of which was
performed on January 16, 2012, pursuant to which Ternium (through certain of its subsidiaries) and Confab
acquired a large block of Usiminas ordinary shares and joined Usiminas’ existing control group. Subsequently, in
2016, Ternium and Confab subscribed to additional ordinary shares and to preferred shares.
146
Consolidated Financial Statements
For the years ended 2023, 2022 and 2021 - all amounts in thousands of U.S. dollars, unless otherwise stated
More recently, on March 30, 2023, Confab, together with Ternium (through its subsidiaries Ternium Investments
and Ternium Argentina), agreed to acquire an additional 68.7 million ordinary shares of Usiminas at a price of BRL10
per ordinary share. The transaction closed on July 3, 2023 and was financed with cash on hand. Tenaris paid
approximately BRL110 million (approximately $22.7 million) in cash for approximately 11 million ordinary shares,
increasing its participation in the Usiminas control group to 9.8%.
The Usiminas control group comprises the T/T Group, formed by Ternium Investments, Ternium Argentina and
Confab; the NSC Group, comprising Nippon Steel Corporation, Mitsubishi and MetalOne; and Usiminas’ employee
pension fund, Previdência Usiminas. At December 31, 2023, the Usiminas control group held, in the aggregate,
483.6 million ordinary shares, representing approximately 68.6% of Usiminas’ voting capital and the T/T Group held
an aggregate participation of 61.3% in the control group (with 51.5% of the control group’s participation
corresponding to Ternium’s subsidiaries, and remaining 9.8% corresponding to Confab); the NSC Group and
Previdência Usiminas held 31.7% and 7%, respectively, in the control group.
Upon closing of the July 3, 2023 acquisition, the then existing Usiminas shareholders agreement governing the
relationship between the T/T Group, the NSC Group and Previdência Usiminas was replaced by a new shareholders
agreement setting forth a new governance structure for Usiminas. The T/T Group is now entitled to nominate a
majority of the Usiminas board of directors, the chief executive officer and four other members of the Usiminas
board of officers. Of the positions allocated to the T/T Group, Tenaris retains the right to nominate one member of
the Usiminas board of directors and one member of the Usiminas board of officers. Ordinary decisions may be
approved with a 55% majority of Usiminas’ control group shares.
At any time after the second anniversary of the closing of the transaction, the T/T Group will have the right to buy
the NSC Group’s remaining interest in the Usiminas control group (153.1 million ordinary shares) at the higher of
BRL10 per share and the 40-trading day average price per share immediately prior to the date of exercising the
option. In addition, the NSC Group will have the right, at any time after the closing of the transaction, to withdraw
its remaining shares from the control group and sell them in the open market after giving the T/T Group the
opportunity to buy them at the 40-trading day average price per share, as well as the right, at any time after the
second anniversary of the closing, to sell such shares to the T/T Group at BRL10 per share. Confab will have the
right but not the obligation to participate in each such transaction pro rata to its current participation in the T/T
Group.
Confab and the Ternium entities party to the Usiminas shareholders agreement have a separate shareholders
agreement governing their respective rights and obligations as members of the T/T Group. Under such separate
agreement, Confab enjoys certain rights with respect to the governance of Usiminas, including, among others, the
ability to nominate certain Usiminas’ officers and directors. Those circumstances evidence that Tenaris continues
having significant influence over Usiminas and, as a result, continues accounting for its investment under the equity
method.
c) Techgen
Techgen S.A. de C.V. (“Techgen”), which operates an electric power plant in Mexico, is a joint venture company
owned 48% by Ternium, 30% by Tecpetrol International S.A. (“Tecpetrol”) and 22% by Tenaris. The Company,
Ternium and Tecpetrol are parties to a shareholders’ agreement relating to the governance of Techgen and are
under the indirect common control of San Faustin. Based on the facts stated above, the Company has determined
that it has significant influence over this entity.
d) Global Pipe Company
Global Pipe Company (“GPC”) is a joint venture, established in 2010 and located in Jubail, Saudi Arabia, which
manufactures LSAW pipes. Until May 16, 2023, Tenaris, through its subsidiary Saudi Steel Pipe Company ("SSPC")
owned 35% of the share capital of GPC and, accordingly was a non-consolidated company.
On May 17, 2023, SSPC acquired an additional 22.3% interest in GPC reaching a participation of 57.3%. The
Company consolidates GPC’s balances and results of operations as from May 17, 2023.
For more information on GPC's acquisition and its accounting treatment see note 34 “Business Combinations -
Global Pipe Company acquisition”.
147
Consolidated Financial Statements
For the years ended 2023, 2022 and 2021 - all amounts in thousands of U.S. dollars, unless otherwise stated
Tenaris carries its investments in non-consolidated companies under the equity method, with no additional goodwill
or intangible assets recognized. Tenaris reviews investments in non-consolidated companies for impairment
whenever events or changes in circumstances indicate that the asset’s carrying amount may not be recoverable. For
more information see note 14 to these Consolidated Financial Statements.
C
Segment information
The Company is organized in one major business segment, Tubes, which is also the reportable operating segment.
All other business activities and operating segments that are not required to be separately reported are disclosed in
the Other segment.
The Tubes segment includes the production and sale of both seamless and welded steel tubular products and related
services mainly for the oil and gas industry, particularly oil country tubular goods (“OCTG”) used in drilling
operations, and for other industrial applications with production processes that consist in the transformation of
steel into tubular products. Business activities included in this segment are mainly dependent on the worldwide oil
and gas industry, as this industry is a major consumer of steel pipe products, particularly OCTG used in drilling
activities. Demand for steel pipe products from the oil and gas industry has historically been volatile and depends
primarily upon the number of oil and natural gas wells being drilled, completed and reworked, and the depth and
drilling conditions of these wells. Sales are generally made to end users, with exports being done through a centrally
managed global distribution network and domestic sales are made through local subsidiaries.
The Other segment includes all business activities related to the production and selling of sucker rods, coiled tubing,
tubes used for plumbing and construction applications, oilfield / hydraulic fracturing services, the recently acquired
coating business and others as energy and raw materials that exceed internal requirements.
Tenaris’s Chief Operating Decision Maker (“CODM”) reviews operating and financial performance information with
senior management on a monthly basis. This information differs from IFRS principally as follows:
▪
▪
▪
the use of direct cost methodology to calculate the inventories, while under IFRS it is at full cost, including
absorption of production overheads and depreciation;
the use of costs based on previously internally defined cost estimates, while, under IFRS, costs are calculated
at historical cost, mainly on a FIFO basis;
any currency translation adjustment reclassification, when applicable, for companies that under IFRS had a
different functional currency than the U.S. dollar; and
▪ other timing differences, if any.
Tenaris presents its geographical information in four areas: North America, South America, Europe and Asia Pacific,
Middle East and Africa. For purposes of reporting geographical information, net sales are allocated to geographical
areas based on the customer’s location; allocation of assets, capital expenditures and associated depreciations and
amortizations are based on the geographical location of the assets.
D
Foreign currency translation
(1)
Functional and presentation currency
IAS 21 (revised), “The effects of changes in foreign exchange rates” defines the functional currency as the currency
of the primary economic environment in which an entity operates.
The functional and presentation currency of the Company is the U.S. dollar. The U.S. dollar is the currency that best
reflects the economic substance of the underlying events and circumstances relevant to Tenaris’s global operations.
Starting January 1, 2023, the Company changed the functional currency of its Brazilian subsidiaries, from the
Brazilian Real to the U.S. dollar.
148
Consolidated Financial Statements
For the years ended 2023, 2022 and 2021 - all amounts in thousands of U.S. dollars, unless otherwise stated
This decision was a result of a significant increase of its Brazilian Subsidiaries’ participation in the OCTG and line
pipe international markets, a trend which started in recent years and has been strengthened in 2022, an increased
level of integration of the local operations within Tenaris’s international commercial and supply chain system, as
well as the fact that the main purchase agreement contracts and the long term sales agreement contracts with
major international and local oil companies are either entered or indexed to the U.S. dollar. Local steel prices are
also being affected by the U.S. dollar / Brazilian Real fluctuations.
Except for the Italian subsidiaries whose functional currency is the Euro and two recently acquired subsidiaries
whose functional currencies are the Canadian Dollar and the Norwegian Krone, Tenaris determined that the
functional currency of its other subsidiaries is the U.S. dollar, based on the following principal considerations:
▪
sales are mainly negotiated, denominated and / or settled in U.S. dollars. If priced in a currency other than
the U.S. dollar, the sales price may consider exposure to fluctuation in the exchange rate against the U.S.
dollar;
▪ prices of their critical raw materials and inputs are priced and / or settled in U.S. dollars;
▪
transaction and operational environment and the cash flow of these operations have the U.S. dollar as
reference currency;
there is a significant level of integration of the local operations within Tenaris’s international global
distribution network;
▪
▪ net financial assets and liabilities are mainly received and maintained in U.S. dollars; and
▪
the exchange rate of certain legal currencies has long-been affected by recurring and severe economic
crises.
(2)
Transactions in currencies other than the functional currency
Transactions in currencies other than the functional currency are translated into the functional currency using the
exchange rates prevailing at the date of the transactions or valuation where items are re-measured.
At the end of each reporting period: (i) monetary items denominated in currencies other than the functional currency
are translated using the closing rates; (ii) non-monetary items that are measured in terms of historical cost in a
currency other than the functional currency are translated using the exchange rates prevailing at the date of the
transactions; and (iii) non-monetary items that are measured at fair value in a currency other than the functional
currency are translated using the exchange rates prevailing at the date when the fair value was determined.
Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at
year-end exchange rates of monetary assets and liabilities denominated in currencies other than the functional
currency are recorded as gains and losses from foreign exchange and included in Other financial results in the
Consolidated Income Statement, except when deferred in equity as qualifying cash flow hedges and qualifying net
investment hedges.
(3)
Translation of financial information in currencies other than the functional currency
Results of operations for subsidiaries whose functional currencies are not the U.S. dollar are translated into U.S.
dollars at the average exchange rates for each quarter of the year. Financial statement positions are translated at
the period-end exchange rates. Translation differences are recognized in a separate component of equity as currency
translation adjustments. In the case of a sale or other disposal of any of such subsidiaries, any accumulated
translation difference would be recognized in the Consolidated Income Statement as a gain or loss from the sale or
disposal following IAS 21.
Goodwill and fair value adjustments arising from the acquisition of a foreign operation are treated as assets and
liabilities of the foreign operation and translated at the closing exchange rate.
E
Property, plant and equipment
Property, plant and equipment are recognized at historical acquisition or construction cost less accumulated
depreciation and impairment losses. Historical cost includes expenditure that is directly attributable to the acquisition
of the items. Property, plant and equipment acquired through acquisitions accounted for as business combinations
have been valued initially at the fair market value of the assets acquired.
149
Consolidated Financial Statements
For the years ended 2023, 2022 and 2021 - all amounts in thousands of U.S. dollars, unless otherwise stated
Major overhaul and rebuilding expenditures are capitalized as property, plant and equipment only when it is
probable that future economic benefits associated with the item will flow to the Company and the investment
enhances the condition of assets beyond its original condition. The carrying amount of the replaced part is
derecognized. Maintenance expenses on manufacturing properties are recorded as cost of products sold in the year
in which they are incurred.
Cost may also include transfers from equity of any gains or losses on qualifying cash flow hedges of foreign currency
purchases of property, plant and equipment.
Borrowing costs that are attributable to the acquisition or construction of certain capital assets are capitalized as
part of the cost of the asset, in accordance with IAS 23 (revised), “Borrowing Costs”. Assets for which borrowing
costs are capitalized are those that require a substantial period of time to prepare for their intended use.
The depreciation method is reviewed at each year end. Depreciation is calculated using the straight-line method to
depreciate the cost of each asset to its residual value over its estimated useful life, as follows:
Land
Buildings and improvements
Plant and production equipment
Vehicles, furniture and fixtures, and other equipment
No Depreciation
30-50 years
10-40 years
4-10 years
The assets’ residual values and useful lives of significant plant and production equipment are reviewed and adjusted,
if appropriate, at each year-end date. An asset’s carrying amount is written down immediately to its recoverable
amount if the asset’s carrying amount is greater than its estimated recoverable amount.
Management’s re-estimation of assets useful lives, performed in accordance with IAS 16, “Property, Plant and
Equipment”, resulted in additional depreciation expenses of approximately $39 million for 2022, and did not
materially affect depreciation expenses for 2023 and 2021.
Tenaris depreciates each significant part of an item of property, plant and equipment for its different production
facilities that (i) can be properly identified as an independent component with a cost that is significant in relation to
the total cost of the item, and (ii) has a useful operating life that is different from another significant part of that
same item of property, plant and equipment.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount of assets and
are recognized under Other operating income or Other operating expenses in the Consolidated Income Statement.
F
Intangible assets
(1) Goodwill
Goodwill represents the excess of the acquisition cost over the fair value of Tenaris’s share of net identifiable assets
acquired as part of business combinations determined mainly by independent valuations. Goodwill is tested at least
annually for impairment and carried at cost less accumulated impairment losses. Impairment losses on goodwill are
not reversed. Goodwill is included in the Consolidated Statement of Financial Position under Intangible assets, net.
For the purpose of impairment testing, goodwill is allocated to a cash generating unit (“CGU”) or group of CGUs
that are expected to benefit from the business combination which generated the goodwill being tested.
(2)
Information systems projects
Costs associated with maintaining computer software programs are generally recognized as an expense as incurred.
However, costs directly related to the development, acquisition and implementation of information systems are
recognized as intangible assets if it is probable that they have economic benefits exceeding one year and comply
with the recognition criteria of IAS 38, “Intangible Assets”.
Information systems projects recognized as assets are amortized using the straight-line method over their useful
lives, generally not exceeding a period of 3 years. Amortization charges are mainly classified as Selling, general and
administrative expenses in the Consolidated Income Statement.
150
Consolidated Financial Statements
For the years ended 2023, 2022 and 2021 - all amounts in thousands of U.S. dollars, unless otherwise stated
Management’s re-estimation of assets useful lives, performed in accordance with IAS 38, did not materially affect
amortization expenses for 2023, 2022 and 2021.
(3)
Licenses, patents, trademarks and proprietary technology
Licenses, patents, trademarks, and proprietary technology are initially recognized at fair value at the acquisition
date. Licenses, patents, proprietary technology and those trademarks that have a finite useful life are carried at cost
less accumulated amortization. Amortization is calculated using the straight-line method to allocate the cost over
their estimated useful lives, which are in the range between 3 and 20 years. Amortization charges are mainly
classified as Cost of sales in the Consolidated Income Statement.
The balance of acquired trademarks that have indefinite useful lives according to external appraisal amounts to
$86.7 million at December 31, 2023, 2022 and 2021, and are included in Hydril CGU. Main factors considered in
the determination of the indefinite useful lives include the years that they have been in service and their recognition
among customers in the industry.
Management’s re-estimation of assets useful lives, performed in accordance with IAS 38, did not materially affect
amortization expenses for 2023, 2022 and 2021.
(4)
Research and development
Research expenditures as well as development costs that do not fulfill the criteria for capitalization are recorded as
Cost of sales in the Consolidated Income Statement as incurred. Research and development expenditures included
in Cost of sales for the years 2023, 2022 and 2021 totaled $60.0 million, $50.7 million and $45.3 million,
respectively.
Capitalized costs were not material for the years 2023, 2022 and 2021.
(5) Customer relationships
In accordance with IFRS 3, "Business Combinations" and IAS 38, Tenaris has recognized the value of customer
relationships separately from goodwill attributable to the acquisition of Maverick Tube Corporation (“Maverick”) and
Hydril Company (“Hydril”) groups, SSPC, Ipsco Tubulars Inc. (“IPSCO”) and the more recent acquisition of Mattr’s pipe
coating business unit.
Customer relationships acquired in a business combination are recognized at fair value at the acquisition date, have a
finite useful life and are carried at cost less accumulated amortization. Amortization is calculated using the straight line
method over the initial expected useful lives which were approximately 14 years for Maverick, 10 years for Hydril, 9
years for SSPC, 3 years for IPSCO, and 4 months for Mattr’s pipe coating business unit.
In 2022, the Company reviewed the useful life of SSPC’s customer relationships and decided to reduce it from 5 years
to 3 years, consequently a higher amortization charge of approximately $4.1 million was recorded in the Consolidated
Income Statement under Selling, general and administrative expenses for the year ended December 31, 2022.
Management’s re-estimation of assets useful lives, performed in accordance with IAS 38, did not affect amortization
expenses for 2023 and 2021.
As of December 31, 2023 the net book value of SSPC’s customer relationship amounted to $26.4 million, with a
residual useful life of 1 year and 9 months, Mattr’s amounted to $21.5, with a residual useful life of 3 months, while
IPSCO’s, Maverick’s and Hydril’s customer relationships were fully amortized.
G
Right-of-use assets and lease liabilities
Leases are recognized as a right-of-use asset and a corresponding liability at the date at which the leased asset is
available for use by the group. Each lease payment is allocated between the liability and finance cost. The finance
cost is charged to profit or loss over the lease period so as to produce a constant periodic rate of interest on the
remaining balance of the liability for each period. The right-of-use asset is depreciated over the lease term on a
straight-line basis.
151
Consolidated Financial Statements
For the years ended 2023, 2022 and 2021 - all amounts in thousands of U.S. dollars, unless otherwise stated
Lease liabilities include the net present value of i) fixed payments, less any lease incentives receivable, ii) variable
lease payments that are based on an index or a rate, iii) amounts expected to be payable by the lessee under residual
value guarantees, iv) the exercise price of a purchase option if the lessee is reasonably certain to exercise that option,
and v) payments of penalties for terminating the lease, if the lease term reflects the lessee exercising that option.
The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be determined,
the lessee’s incremental borrowing rate is used, being the rate that the lessee would have to pay to borrow the
funds necessary to obtain an asset of similar value in a similar economic environment with similar terms and
conditions.
Right-of-use assets are measured at cost comprising the amount of the initial measurement of the lease liability,
any lease payments made at or before the commencement date less any lease incentives received and any initial
direct costs incurred by the lessee.
In determining the lease term, management considers all facts and circumstances that create an economic incentive
to exercise an extension option or early termination, or not to exercise a termination option. Extension options (or
periods after termination options) are only included in the lease term if the lease is reasonably certain to be extended
(or not terminated).
Payments associated with short-term leases, variable leases and leases of low value assets are recognized on a
straight-line basis as expenses in profit or loss. Short-term leases are leases with a lease term of 12 months or less.
H
Impairment of non-financial assets
Long-lived assets including identifiable intangible assets are reviewed for impairment at the lowest level for which
there are separately identifiable cash flows (“CGU”). Most of the Company’s principal subsidiaries that constitute
a CGU have a single main production facility and, accordingly, each of such subsidiaries represents the lowest level
of asset aggregation that generates largely independent cash inflows.
Assets that are subject to amortization or depreciation are reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amount may not be recoverable. Intangible assets with indefinite useful
lives, including goodwill, are subject to at least an annual impairment test, or are tested more frequently if events
or circumstances indicate that the carrying amount value may be impaired. In some situations where there have not
been significant changes to CGU assets and liabilities as well as external and internal events and circumstances
which could materially alter the recoverable amount of the CGU, the most recent detailed calculation of recoverable
amount made in a preceding period may be used in the impairment test for that CGU in the current period.
In assessing whether there is any indication that a CGU may be impaired, external and internal sources of
information are analyzed. Material facts and circumstances specifically considered in the analysis usually include the
discount rate used in Tenaris’s cash flow projections and the business condition in terms of competitive, economic
and regulatory factors, such as the cost of raw materials, oil and gas prices, and the evolution of the rig count.
An impairment loss is recognized for the amount by which the asset’s carrying amount exceeds its recoverable
amount. The recoverable amount is the higher between the asset’s value in use and fair value less costs of disposal.
Any impairment loss is allocated to reduce the carrying amount of the assets of the CGU in the following order:
(a) first, to reduce the carrying amount of any goodwill allocated to the CGU; and
(b) then, to the other assets of the unit (group of units) pro-rata on the basis of the carrying amount of each asset
in the unit (group of units), considering not to reduce the carrying amount of the asset below the highest of its fair
value less cost of disposal, its value in use or zero.
Value in use is calculated by discounting the estimated cash flows over a five year period (or higher if the period
can be justified) based on forecasts approved by management. For the subsequent years beyond the five-year
period, a terminal value is calculated based on perpetuity considering a nominal growth rate of 2% taking into
account among others, mainly the historical inflation rate.
For purposes of calculating the fair value less costs of disposal, Tenaris uses the estimated value of future cash flows
that a market participant could generate from the corresponding CGU.
152
Consolidated Financial Statements
For the years ended 2023, 2022 and 2021 - all amounts in thousands of U.S. dollars, unless otherwise stated
Management judgment is required to estimate discounted future cash flows. Actual cash flows and values could
vary significantly from the forecasted future cash flows and related values derived using discounting techniques.
Non-financial assets other than goodwill that suffered an impairment are reviewed for possible reversal at each
reporting date. For more information on impairment charges see note 5 to these Consolidated Financial Statements.
I
Other investments
Other investments consist primarily of investments in financial instruments and time deposits with a maturity of
more than three months at the date of purchase.
Certain non-derivative financial assets that the Company held not for trading have been categorized as financial
assets at fair value through other comprehensive income (“FVOCI”), as the business model objective is achieved by
both holding financial assets in order to collect contractual cash flows and selling financial assets. They are carried
at fair value and interest income from these financial assets is included in finance income using the effective interest
rate method. Unrealized gains or losses are recorded as a fair value adjustment in the Consolidated Statement of
Comprehensive Income and transferred to the Consolidated Income Statement when the financial asset is disposed.
Exchange gains and losses and impairments related to the financial assets are immediately recognized in the
Consolidated Income Statement. FVOCI instruments with maturities greater than 12 months after the balance sheet
date are included in non-current assets.
Other investments in financial instruments and time deposits are categorized as financial assets at fair value through
profit or loss (“FVPL”) because such investments are held for trading and their performance is evaluated on a fair
value basis. The results of these investments are recognized in Financial Results in the Consolidated Income
Statement.
Purchases and sales of financial investments are recognized as of their settlement date.
The fair values of quoted investments are generally based on current bid prices. If the market for a financial investment
is not active or the securities are not listed, Tenaris estimates the fair value by using standard valuation techniques. See
section III Financial Risk Management.
J
Inventories
Inventories are stated at the lower between cost and net realizable value. The cost of finished goods and goods in
process is comprised of raw materials, direct labor, utilities, freights and other direct costs and related production
overhead costs, and it excludes borrowing costs. The allocation of fixed production costs, including depreciation
and amortization charges, is based on the normal level of production capacity. Inventories cost is mainly based on
the FIFO method. Tenaris estimates the net realizable value of inventories by grouping, where applicable, similar or
related items. Net realizable value is the estimated selling price in the ordinary course of business, less any estimated
costs of completion and selling expenses. Goods in transit as of year-end are valued based on the supplier’s invoice
cost.
Tenaris establishes an allowance for obsolete or slow-moving inventories related to finished goods, goods in process,
supplies and spare parts. For slow moving or obsolete finished products, an allowance is established based on
management’s analysis of product aging. An allowance for obsolete and slow-moving inventory of supplies and
spare parts is established based on management's analysis of such items to be used as intended and the
consideration of potential obsolescence due to technological changes, aging and consumption patterns.
K
Trade and other receivables
Trade and other receivables are recognized initially at fair value that corresponds to the amount of consideration that
is unconditional unless they contain significant financing components. The Company holds trade receivables with the
objective to collect the contractual cash flows and therefore measures them subsequently at amortized cost using the
effective interest method. Due to their short-term nature, their carrying amount is considered to be the same as their
fair value.
153
Consolidated Financial Statements
For the years ended 2023, 2022 and 2021 - all amounts in thousands of U.S. dollars, unless otherwise stated
Tenaris applies the IFRS 9 “Financial Instruments” simplified approach to measure expected credit losses, which uses
a lifetime expected loss allowance for all trade receivables. To measure the expected credit losses, trade receivables
have been grouped based on shared credit risk characteristics and the days past due. The expected loss rates are based
on the payment profiles of sales over a period of three years and the corresponding historical credit losses experienced
within this period. The expected loss allowance also reflects current and forward-looking information on
macroeconomic factors affecting the ability of each customer to settle the receivables.
L
Cash and cash equivalents
Cash and cash equivalents are comprised of cash at banks, liquidity funds and short-term investments with a maturity
of less than three months at the date of purchase which are readily convertible to known amounts of cash. Assets
recorded in cash and cash equivalents are carried at fair market value or at historical cost which approximates fair
market value.
In the Consolidated Statement of Financial Position, bank overdrafts are included in Borrowings in current liabilities.
For the purposes of the Consolidated Statement of Cash Flows, Cash and cash equivalents includes overdrafts.
M
Equity
(1)
Equity components
The Consolidated Statement of Changes in Equity includes:
▪
▪
the value of share capital, legal reserve, share premium and other distributable reserves calculated in
accordance with Luxembourg law;
the currency translation adjustment, treasury shares, other reserves, retained earnings and non-controlling
interest calculated in accordance with IFRS.
(2)
Share capital
The Company has an authorized share capital of a single class of 2.5 billion shares having a nominal value of $1.00
per share. Total ordinary shares issued as of December 31, 2023, 2022 and 2021 were 1,180,536,830 with a par
value of $1.00 per share with one vote each. Total ordinary shares outstanding as of December 31, 2023, were
1,167,888,739 and as of December 31, 2022 and 2021 were 1,180,536,830 with a par value of $1.00 per share
with one vote each. Outstanding shares do not include treasury shares. All issued shares are fully paid.
(3)
Treasury Shares
Acquisitions of treasury shares are recorded at acquisition cost, deducted from equity until disposal or cancellation.
Any potential gains or losses on disposal of treasury shares are recognized under Other reserves in the Consolidated
Statement of Changes in Equity. Treasury shares outstanding as of December 31, 2023, were 12,648,091.
(4)
Dividends distribution by the Company to shareholders
Dividends distributions are recorded in the Company’s financial statements when Company’s shareholders have the
right to receive the payment, or when interim dividends are approved by the Board of Directors in accordance with
the by-laws of the Company.
Dividends may be paid by the Company to the extent that it has distributable retained earnings, calculated in
accordance with Luxembourg law. See note 27 (iii) to these Consolidated Financial Statements.
N
Borrowings
Borrowings are recognized initially at fair value net of transaction costs incurred and subsequently measured at
amortized cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is
recognized in profit or loss over the period of the borrowings using the effective interest method.
154
Consolidated Financial Statements
For the years ended 2023, 2022 and 2021 - all amounts in thousands of U.S. dollars, unless otherwise stated
O
Current and deferred income tax
The income tax expense or credit for the period is the tax payable or recoverable on the current period’s taxable
income based on the applicable income tax rate for each jurisdiction adjusted by changes in deferred tax assets and
liabilities attributable to temporary differences and to unused tax losses. Current and deferred tax is recognized in
the Consolidated Income Statement, except to the extent that it relates to items recognized in other comprehensive
income or directly in equity. In these cases, the tax is also recognized in other comprehensive income or directly in
equity, respectively.
The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the
reporting date in the countries where the Company’s subsidiaries operate and generate taxable income.
Deferred income tax is recognized applying the liability method on temporary differences arising between the tax
bases of assets and liabilities and their carrying amounts in the financial statements. The temporary differences arise
mainly from net operating loss carry-forwards, the effect of currency translation on depreciable fixed assets and
inventories, depreciation on property, plant and equipment, valuation of inventories, provisions for post-
employment benefits and other long-term employee benefits and fair value adjustments of assets acquired in
business combinations. However, deferred tax liabilities are not recognized if they arise from the initial recognition
of goodwill. Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the time
period when the asset is realized or the liability is settled, based on tax laws that have been enacted or substantively
enacted at the reporting date.
Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax
regulation is subject to interpretation and considers whether it is probable that a taxation authority will accept an
uncertain tax treatment. The Company measures its tax balances either based on the most likely amount or the
expected value, depending on which method provides a better prediction of the resolution of the uncertainty.
Deferred tax assets are recognized to the extent that it is probable that future taxable profits will be available against
which the temporary differences and losses can be utilized. At the end of each reporting period, Tenaris reassesses
unrecognized deferred tax assets. Tenaris recognizes a previously unrecognized deferred tax asset to the extent that
it has become probable that future taxable income will allow the deferred tax asset to be recovered.
Deferred tax liabilities and assets are not recognized for temporary differences between the carrying amount and
tax basis of investments in foreign operations where the company is able to control the timing of the reversal of the
temporary differences and it is probable that the differences will not reverse in the foreseeable future.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and
liabilities and when the deferred tax balances relate to the same taxation authority. Current tax assets and tax
liabilities are offset where the entity has a legally enforceable right to offset and intends either to settle on a net
basis, or to realize the asset and settle the liability simultaneously.
Deferred tax assets and liabilities are re-measured if tax rates change. These amounts are charged or credited to the
Consolidated Income Statement or to the item Other comprehensive income in the Consolidated Statement of
Comprehensive Income, depending on the account to which the original amount was charged or credited.
P
Employee benefits
(1)
Short-term obligations
Liabilities for wages and salaries are recognized in respect of employees’ services up to the end of the reporting
period and are measured at the amounts expected to be paid when the liabilities are settled. The liabilities are
presented as current employee benefit obligations in the balance sheet.
(2)
Post-employment benefits
The Company has defined benefit and defined contribution plans. A defined benefit plan is a pension plan that
defines an amount of pension benefit that an employee will receive on retirement, usually dependent on one or
more factors such as age, years of service and compensation.
155
Consolidated Financial Statements
For the years ended 2023, 2022 and 2021 - all amounts in thousands of U.S. dollars, unless otherwise stated
The liability recognized in the statement of financial position in respect of defined benefit pension plans is the
present value of the defined benefit obligation at the end of the reporting period less the fair value of plan assets,
if any. The defined benefit obligation is calculated annually (at year end) by independent actuaries using the
projected unit credit method. The present value of the defined benefit obligation is determined by discounting the
estimated future cash flows using interest rates of high-quality corporate bonds that are denominated in the
currency in which the benefits will be paid, and that have terms to maturity approximating to the terms of the
related pension obligation.
Remeasurement gains and losses arising from experience adjustments and changes in actuarial assumptions are
charged or credited to equity in Other comprehensive income in the period in which they arise. Past-service costs
are recognized immediately in the Income Statement.
For defined benefit funded plans, net interest income / expense is calculated based on the surplus or deficit derived
by the difference between the defined benefit obligations less fair value of plan assets.
For defined contribution plans, the Company pays contributions to publicly or privately administered pension
insurance plans on a mandatory, contractual or voluntary basis. The Company has no further payment obligations
once the contributions have been paid. The contributions are recognized as employee benefit expenses when they
are due. Prepaid contributions are recognized as an asset to the extent that a cash refund or a reduction in the
future payments is available.
Tenaris sponsors funded and unfunded defined benefit pension plans in certain subsidiaries. The most significant
are:
▪ An unfunded defined benefit employee retirement plan for certain senior officers. The plan is designed to
provide certain benefits to those officers (additional to those contemplated under applicable labor laws) in
case of termination of the employment relationship due to certain specified events, including retirement.
This unfunded plan provides defined benefits based on years of service and final average salary. As of
December 31, 2023 the outstanding liability for this plan amounts to $48.1 million.
▪
▪
▪
Employees’ service rescission indemnity. The cost of this obligation is charged to the Consolidated Income
Statement over the expected service lives of employees. This provision is primarily related to the liability
accrued for employees at Tenaris’s Italian subsidiary. As from January 1, 2007 as a consequence of a change
in an Italian law, employees were entitled to make contributions to external funds, thus, Tenaris’s Italian
subsidiary pays every year the required contribution to the funds with no further obligation. As a result, the
plan changed from a defined benefit plan to a defined contribution plan effective from that date, but only
limited to the contributions of 2007 onwards. As of December 31, 2023 the outstanding liability for this
plan amounts to $10.6 million.
Funded retirement benefit plan held in the U.S. for the benefit of some employees hired prior a certain
date, frozen for the purposes of credited service as well as determination of final average pay for the
retirement benefit calculation. Plan assets consist primarily of investments in equities and money market
funds. Additionally, an unfunded post-retirement health and life plan is in place that offers limited medical
and life insurance benefits to the retirees, frozen to new participants. As of December 31, 2023 the
outstanding liability for these plans amounts to $5.6 million.
Funded retirement benefit plans held in Canada for salary and hourly employees hired prior to a certain
date based on years of service and, in the case of salaried employees, final average salary. Plan assets consist
primarily of annuities purchased from an insurance company for the benefit of current and future retirees,
investments in debt and equity instruments. Both plans were replaced for defined contribution plans.
Effective June 2016 the salary plan was frozen for the purposes of credited service as well as determination
of final average pay. As of December 31, 2023 the plan was overfunded and the net assets related to this
plan amounted to $10.8 million.
(3)
Other long-term benefits
During 2007, Tenaris launched an employee retention and long-term incentive program (“the Program”) applicable
to certain senior officers and employees of the Company, who will be granted a number of units throughout the
duration of the Program. The value of each of these units is based on Tenaris’s shareholders’ equity (excluding non-
controlling interest). Until the end of 2017, the units were vested ratably over a period of four years and were
mandatorily redeemed by the Company ten years after grant date, with the option of an early redemption at seven
years after the grant date. Since 2018, the units are vested ratably over the same period and are mandatorily
redeemed by the Company seven years after grant date.
156
Consolidated Financial Statements
For the years ended 2023, 2022 and 2021 - all amounts in thousands of U.S. dollars, unless otherwise stated
The beneficiaries of the Program are entitled to receive cash amounts based on: (i) the amount of dividend payments
made by Tenaris to its shareholders and (ii) the number of units held by each beneficiary to the Program. The
payment of the benefit is tied to the book value of the shares, and not to their market value. Tenaris valued this
long-term incentive program as a long-term benefit plan as classified in IAS 19, “Employee Benefits”.
As of December 31, 2023 and 2022, the outstanding liability corresponding to the Program amounts to $119.6
million and $94.4 million, respectively. The total value of the units granted (vested and unvested) to date under the
program, considering the number of units and the book value per share as of December 31, 2023 and 2022, is
$144.0 million and $123.9 million, respectively.
(4)
Termination benefits
Termination benefits are payable when employment is terminated by Tenaris before the normal retirement date, or
when an employee accepts voluntary redundancy in exchange for these benefits. Tenaris recognizes termination
benefits at the earlier of the following dates: (a) when it can no longer withdraw the offer of those benefits; and
(b) when the costs for a restructuring that is within the scope of IAS 37 involves the payment of terminations
benefits. In the case of an offer made to encourage voluntary redundancy, the termination benefits are measured
based on the number of employees expected to accept the offer.
(5)
Other compensation obligations
Employee entitlements to annual leave, long-service leave, sick leave and other bonuses and compensations
obligations are accrued as earned.
Compensation to employees in the event of dismissal is charged to income in the year in which it becomes payable.
Q
Provisions
Tenaris is subject to various claims, lawsuits and other legal proceedings, including customer claims, in which a third
party is seeking payment for alleged damages, reimbursement for losses or indemnity. Tenaris’s potential liability
with respect to such claims, lawsuits and other legal proceedings cannot be estimated with certainty. Management
periodically reviews the status of each significant matter and assesses potential financial exposure. If, as a result of
past events, a potential loss from a claim or proceeding is considered probable and the amount can be reliably
estimated, a provision is recorded. Accruals for loss contingencies reflect a reasonable estimate of the losses to be
incurred based on information available to management as of the date of preparation of the financial statements,
and take into consideration Tenaris’s litigation and settlement strategies. These estimates are primarily constructed
with the assistance of legal counsel. As the scope of liabilities become better defined, there may be changes in the
estimates of future costs which could have a material adverse effect on its results of operations, financial condition
and cash flows.
If Tenaris expects to be reimbursed for an accrued expense, as would be the case for an expense or loss covered
under an insurance contract, and reimbursement is considered virtually certain, the expected reimbursement is
recognized as a receivable.
This note should be read in conjunction with note 27 to these Consolidated Financial Statements.
R
Trade and other payables
Trade and other payables are recognized initially at fair value, generally the nominal invoice amount and
subsequently measured at amortized cost. They are presented as current liabilities unless payment is not due within
twelve months after the reporting period. Due to their short-term nature their carrying amounts are considered to
be the same as their fair value.
157
Consolidated Financial Statements
For the years ended 2023, 2022 and 2021 - all amounts in thousands of U.S. dollars, unless otherwise stated
S
Revenue recognition
Revenue comprises the fair value of the consideration received or receivable for the sale of goods and rendering of
services in the ordinary course of Tenaris’s activities. The revenue recognized by the Company is measured at the
transaction price of the consideration received or receivable to which the Company is entitled to, reduced by
estimated returns and other customer credits, such as discounts and volume rebates, based on the expected value
to be realized and after eliminating sales within the group.
Revenue is recognized at a point in time or over time from sales when control has been transferred and there is no
unfulfilled performance obligation that could affect the acceptance of the product by the customer. The control is
transferred upon delivery. Delivery occurs when the products have been shipped to the specific location, the risks
of obsolescence and loss have been transferred and either the customer has accepted the product in accordance
with the sales contract, the acceptance provisions have lapsed or the Company has objective evidence that all criteria
for acceptance have been satisfied, including all performance obligations. These conditions are determined and
analyzed on a contract by contract basis to ensure that all performance obligations are fulfilled. In particular, Tenaris
verifies customer acceptance of the goods, the satisfaction of delivery terms and any other applicable condition.
For bill and hold transactions revenue is recognized only to the extent that (a) the reason for the bill and hold
arrangement must be substantive (for example, the customer has requested the arrangement); (b) the products
have been specifically identified and are ready for delivery; (c) the Company does not have the ability to use the
product or to direct it to another customer; (d) the usual payment terms apply.
The Company’s contracts with customers do not provide any material variable consideration, other than discounts,
rebates and right of return. Discounts and rebates are recognized based on the most likely value and rights of return
are based on expected value considering past experience and contract conditions.
Where the contracts include multiple performance obligations, the transaction price is allocated to each
performance obligation based on the stand-alone selling prices. Where these are not directly observable, they are
estimated based on the expected cost plus margin.
There are no judgements applied by management that significantly affect the determination of timing of satisfaction
of performance obligations, nor the transaction price and amounts allocated to different performance obligations.
Tenaris provides services primarily related to goods sold, which represent a non-material portion of sales revenue
and mainly include:
Pipe Management Services: This comprises mainly preparation of the pipes ready to be run, delivery to the customer,
storage services and rig return.
Field Services: Comprises field technical support and running assistance.
These services are rendered in connection to the sales of goods and are attached to contracts with customers for
the sale of goods. A significant portion of service revenue is recognized in the same period as the goods sold. There
are no distinct uncertainties in the revenues and cash flows of the goods sold and services rendered as they are
included in the same contract, have the same counterparty and are subject to the same conditions.
The Company also provides hydraulic fracturing, coiled tubing and coating services. The revenue related to these
services is included in the Other segment.
Revenue from providing services is recognized over time in the accounting period in which the services are rendered.
The following inputs and outputs methods are applied to recognize revenue considering the nature of service:
Storage services: the Company provides storage services in owned or third-party warehouses, subject to a variable
fee to be invoiced. This fee is determined based on the time that the customer maintains the material in the
warehouse and the amount of the material stored. In the majority of cases, to quantify the amount to be invoiced
in any given month, the monthly average fee of storage per ton is multiplied by the monthly average stock stored
(in tons).
158
Consolidated Financial Statements
For the years ended 2023, 2022 and 2021 - all amounts in thousands of U.S. dollars, unless otherwise stated
Freights: the revenue is recognized on a pro rata basis considering the units delivered and time elapsed.
Field services: the revenue is recognized considering output methods, in particular surveys of service completion
provided by the customer.
The Company does not expect to have any contracts where the period between the transfer of the promised goods
or services to the customer and payment by the customer exceeds one year. As a consequence, considering that
the contracts do not include any significant financing component, the Company does not adjust any of the
transaction prices for the time value of money. For this reason, the Company is also applying the practical expedient
not to disclose details on transaction prices allocated to the remaining performance obligations as of the end of the
reporting period.
Tenaris only provides standard quality warranties assuring that the goods sold will function as expected or are fit
for their intended purpose, with no incremental service to the customer. Accordingly, warranties do not constitute
a separate performance obligation.
Other revenues earned by Tenaris are recognized on the following basis:
Interest income: on the effective yield basis.
▪
▪ Dividend income from investments in other companies: when Tenaris’s right to receive payment is
established.
▪ Net income from other sales: when control is transferred to the customer.
▪ Construction / coating contracts revenues: in accordance with the stage of the project completion.
T
Cost of sales and other selling expenses
Cost of sales and other selling expenses are recognized in the Consolidated Income Statement on the accrual basis
of accounting.
Commissions, freights and other selling expenses, including shipping and handling costs, are recorded in Selling,
general and administrative expenses in the Consolidated Income Statement.
U
Earnings per share
Earnings per share are calculated by dividing the income attributable to the shareholders’ equity by the monthly
weighted average number of common shares outstanding during the period.
There are no dilutive potential ordinary shares.
V
Financial instruments
Non-derivative financial instruments comprise investments in financial debt instruments and equity, time deposits,
trade and other receivables, cash and cash equivalents, borrowings and trade and other payables.
The Company classifies its financial instruments according to the following measurement categories:
▪
▪
those to be measured subsequently at fair value (either through OCI or through profit or loss), and
those to be measured at amortised cost.
The classification depends on the Company’s business model for managing the financial assets and contractual
terms of the cash flows.
Financial assets are recognized on their settlement date. Financial assets are derecognized when the rights to receive
cash flows from the financial assets have expired or have been transferred and the Company has transferred
substantially all the risks and rewards of ownership.
159
Consolidated Financial Statements
For the years ended 2023, 2022 and 2021 - all amounts in thousands of U.S. dollars, unless otherwise stated
At initial recognition, the Company measures a financial asset at its fair value plus, in the case of a financial asset
not at fair value through profit or loss, transaction costs that are directly attributable to the acquisition of the
financial asset. Transaction costs of financial assets carried at fair value through profit or loss are expenses in profit
or loss.
Subsequent measurement of debt instruments depends on the Company’s business model for managing the asset
and the cash flow characteristics of the asset. There are three measurement categories into which the Company
classifies its debt instruments:
Amortized Cost: Assets that are held for collection of contractual cash flows where those cash flows represent solely
payments of principal and interest. Interest income from these financial assets is included in finance income using
the effective interest rate method.
Exchange gains and losses and impairments related to the financial assets are immediately recognized in the
Consolidated Income Statement.
Fair value through other comprehensive income: Assets that are held for collection of contractual cash flows and
for selling the financial assets, where the assets’ cash flows represent solely payments of principal and interest.
Interest income from these financial assets is included in finance income using the effective interest rate method.
Unrealized gains or losses are recorded as a fair value adjustment in the Consolidated Statement of Comprehensive
Income and transferred to the Consolidated Income Statement when the financial asset is sold.
Fair value through profit and loss: Assets that do not meet the criteria for amortized cost or FVOCI. Changes in fair
value of financial instruments at FVPL are immediately recognized in the Consolidated Income Statement.
Equity instruments are subsequently measured at fair value.
Accounting for derivative financial instruments and hedging activities is included within the section III, Financial Risk
Management.
160
Consolidated Financial Statements
For the years ended 2023, 2022 and 2021 - all amounts in thousands of U.S. dollars, unless otherwise stated
III. FINANCIAL RISK MANAGEMENT
The multinational nature of Tenaris’s operations and customer base exposes the Company to a variety of risks,
mainly related to market risks (including the effects of changes in foreign currency exchange rates and interest
rates), credit risk and capital market risk. In order to manage the volatility related to these exposures, management
evaluates exposures on a consolidated basis, taking advantage of exposure netting. The Company or its subsidiaries
may then enter into various derivative transactions in order to prevent potential adverse impacts on Tenaris’s
financial performance. Such derivative transactions are executed in accordance with internal policies and hedging
practices.
A. Financial risk factors
(i) Capital risk management
Tenaris seeks to maintain a low debt to total equity ratio considering the industry and the markets where it operates.
The year-end ratio of debt to total equity (where “debt” comprises financial borrowings and “total equity” is the
sum of financial borrowings and equity) is 0.03 as of December 31, 2023 and 0.05 as of December 31, 2022. The
Company does not have to comply with regulatory capital adequacy requirements.
(ii)
Foreign exchange risk
Tenaris manufactures and sells its products in a number of countries throughout the world and consequently is
exposed to foreign exchange rate risk. Since the Company’s functional currency is the U.S. dollar the purpose of
Tenaris’s foreign currency hedging program is mainly to reduce the risk caused by changes in the exchange rates of
other currencies against the U.S. dollar.
Tenaris’s exposure to currency fluctuations is reviewed on a periodic and consolidated basis. A number of derivative
transactions are performed in order to achieve an efficient coverage in the absence of operative or natural hedges.
Almost all of these transactions are forward exchange rates contracts. See note 26 to these Consolidated Financial
Statements.
Tenaris does not enter into derivative financial instruments for trading or other speculative purposes, other than
non-material investments in structured products.
In the case of subsidiaries with functional currencies other than the U.S. dollar, the results of hedging activities,
reported in accordance with IFRS, may not reflect entirely the management’s assessment of its foreign exchange
risk hedging program. Intercompany balances between Tenaris’s subsidiaries may generate financial gains (losses)
to the extent that functional currencies differ.
The value of Tenaris’s financial assets and liabilities is subject to changes arising from the variation of foreign
currency exchange rates. The following table provides a breakdown of Tenaris’s main financial assets and liabilities
(including foreign exchange derivative contracts) which impact the Company’s profit and loss as of December 31,
2023 and 2022.
All amounts Long / (Short) in thousands of U.S. dollars
Currency Exposure / Functional currency
Argentine Peso / U.S. dollar
Euro / U.S. dollar
Saudi Arabian Riyal / U.S. dollar
The main relevant exposures correspond to:
▪ Argentine Peso / U.S. dollar
As of December 31,
2023
(134,716)
(203,608)
(181,931)
2022
(126,739)
(42,458)
(74,183)
As of December 31, 2023 and 2022 consisting primarily of Argentine Peso-denominated financial, trade, social and
fiscal payables at certain Argentine subsidiaries whose functional currency is the U.S. dollar. A change of 1% in the
ARS/USD exchange rate would have generated a pre-tax gain / loss of $1.3 million and $1.3 million as of December
31, 2023 and 2022 respectively.
161
Consolidated Financial Statements
For the years ended 2023, 2022 and 2021 - all amounts in thousands of U.S. dollars, unless otherwise stated
▪ Euro / U.S. dollar
As of December 31, 2023 and 2022 consisting primarily of Euro-denominated intercompany liabilities at certain
subsidiaries whose functional currency is the U.S. dollar. A change of 1% in the EUR/USD exchange rate would
have generated a pre-tax gain / loss of $2.0 million and $0.4 million as of December 31, 2023 and 2022,
respectively, which would have been to a large extent offset by changes in currency translation adjustment
included in Tenaris’s net equity position.
▪ Saudi Arabian Riyal / U. S. dollar
As of December 31, 2023 and 2022 consisting primarily of Saudi Arabian Riyal-denominated financial and trade
payables. The Saudi Arabian Riyal is tied to the U.S. dollar.
Considering the balances held as of December 31, 2023 on financial assets and liabilities exposed to foreign
exchange rate fluctuations, Tenaris estimates that the impact of a simultaneous 1% favorable / unfavorable
movement in the levels of foreign currencies exchange rates relative to the U.S. dollar, would be a pre-tax gain /
loss of $6.7 million (including a loss / gain of $2.3 million due to foreign exchange derivative contracts), which
would be partially offset by changes to Tenaris’s net equity position of $1.1 million. For balances held as of
December 31, 2022, a simultaneous 1% favorable / unfavorable movement in the foreign currencies exchange
rates relative to the U.S. dollar, would have generated a pre-tax gain / loss of $4.0 million (including a loss / gain
of $0.2 million due to foreign exchange derivative contracts), which would have been partially offset by changes
to Tenaris’s net equity position of $0.9 million.
Tenaris based its foreign exchange sensitivity analysis on a 1% variance for information purposes only, enabling the
analysis to any particular variance.
(iii)
Interest rate risk
Tenaris is subject to interest rate risk on its investment portfolio and its debt. The Company uses a mix of variable
and fixed rate debt in combination with its investment portfolio strategy. The Company may choose to enter into
foreign exchange derivative contracts and / or interest rate swaps to mitigate the exposure to changes in the
interest rates.
The following table summarizes the proportions of variable-rate and fixed-rate debt as of each year end.
Fixed rate (*)
Variable rate
Total
As of December 31,
2023
2022
In thousands of U.S. dollars
294,946
288,491
583,437
%
51%
49%
In thousands of U.S. dollars
497,889
230,873
728,762
%
68%
32%
(*) Out of the $294.9 million fixed rate borrowings, $271.1 million are short-term.
The Company estimates that, if market interest rates applicable to Tenaris’s borrowings had been 100 basis points
higher, then the additional pre-tax loss would have been $6.4 million in 2023 and $5.3 million in 2022.
Tenaris based its interest rate sensitivity analysis on a 100 basis points variance for information purposes only,
enabling the analysis to any particular variance.
(iv) Credit risk
Credit risk arises from cash and cash equivalents, deposits with banks and financial institutions, as well as credit
exposures to customers, including outstanding receivables and committed transactions. The Company also actively
monitors the creditworthiness of its treasury, derivative and insurance counterparties in order to minimize its credit
risk.
No single customer comprised more than 10% of Tenaris’s net sales in 2023, 2022 and 2021.
162
Consolidated Financial Statements
For the years ended 2023, 2022 and 2021 - all amounts in thousands of U.S. dollars, unless otherwise stated
Tenaris maintains a strong, longstanding relationship with Petróleos Mexicanos (“Pemex”), one of the world’s
largest crude oil and condensates producers and one of its largest customers. Over the past several months, Pemex
has delayed payments beyond the agreed-upon due dates, resulting in Tenaris having a significant credit exposure
to Pemex, which represented approximately 20% of the Company’s overall credit exposure as of December 31,
2023. The Company has not historically had any material write-offs due to uncollectible accounts receivable relating
to this customer. Although the parties are in continuous conversations and Pemex is making partial payments on a
periodic basis, at this stage the Company cannot predict whether or not its exposure to Pemex will be reduced, or
the timing for any such reduction.
Tenaris’s credit policies related to sales of products and services are designed to identify customers with acceptable
credit history and to allow Tenaris to require the use of credit insurance, letters of credit and other instruments
designed to minimize credit risks whenever deemed necessary. Tenaris maintains allowances for impairment for
potential credit losses. See section II.K.
As of December 31, 2023, trade receivables amounted to $2,480.9 million. Trade receivables had guarantees under
credit insurance of $212.7 million, letter of credit and other bank guarantees of $48.4 million. Overdue trade
receivables amounted to $679.6 million, overdue guaranteed trade receivables amounted to $24.4 million; and the
allowance for doubtful accounts amounted to $49.0 million.
As of December 31, 2022, trade receivables amounted to $2,493.9 million. Trade receivables had guarantees under
credit insurance of $231.2 million, letter of credit and other bank guarantees of $34.7 million. Overdue trade
receivables amounted to $544.9 million, overdue guaranteed trade receivables amounted to $28.1 million; and the
allowance for doubtful accounts amounted to $45.5 million.
Management believes that both the allowance for doubtful accounts and the existing guarantees are sufficient to
cover doubtful trade receivables.
(v) Counterparty risk
Tenaris has investment guidelines with specific parameters to limit issuer risk on marketable securities.
Counterparties for derivatives and cash transactions are limited to high credit quality financial institutions, normally
investment grade.
Approximately 91% of Tenaris’s liquid financial assets corresponded to Investment Grade-rated instruments as of
December 31, 2023, in comparison with approximately 80% as of December 31, 2022.
(vi)
Liquidity risk
Tenaris’s financing strategy aims to maintain adequate financial resources and access to additional liquidity. During
2023, Tenaris has counted on cash flows from operations as well as additional bank financing to fund its
transactions.
Management maintains sufficient cash and marketable securities to finance normal operations and believes that
Tenaris also has appropriate access to market for short-term working capital needs.
Liquid financial assets as a whole (comprising cash and cash equivalents and other investments) were 19% and 9%
of total assets at the end of 2023 and 2022, respectively.
Tenaris has a conservative approach to the management of its liquidity, which consists of i) cash and cash
equivalents (cash in banks, liquidity funds and investments with a maturity of less than three months at the date of
purchase), and ii) other investments (fixed income securities, time deposits, and fund investments).
Tenaris holds primarily investments in money market funds and variable or fixed-rate securities from investment
grade issuers.
Tenaris holds its investments primarily in U.S. dollars. As of December 31, 2023 and 2022, U.S. dollar denominated
liquid assets plus investments denominated in other currencies hedged to the U.S. dollar represented approximately
94% and 87% of total liquid financial assets, respectively.
163
Consolidated Financial Statements
For the years ended 2023, 2022 and 2021 - all amounts in thousands of U.S. dollars, unless otherwise stated
(vii) Commodity price risk
In the ordinary course of its operations, Tenaris purchases commodities and raw materials that are subject to price
volatility caused by supply conditions, political and economic variables and other factors. As a consequence, Tenaris
is exposed to risk resulting from fluctuations in the prices of these commodities and raw materials. Tenaris fixes the
prices of such raw materials and commodities for short-term periods, typically not in excess of one year, and in
general hedging for these risks is performed on a limited basis.
B. Category of financial instruments and classification within the fair value hierarchy
As mentioned in note II.V, the Company classifies its financial instruments in the following measurement categories:
amortized cost, fair value through other comprehensive income and fair value through profit and loss. For financial
instruments that are measured in the statement of financial position at fair value, IFRS 13, “Fair value measurement”
requires a disclosure of fair value measurements by level according to the following fair value measurement
hierarchy:
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either
directly (that is, as prices) or indirectly (that is, derived from prices).
Level 3: Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs).
The following tables present the financial instruments by category and levels as of December 31, 2023 and 2022.
December 31, 2023
Assets
Cash and cash equivalents
Other investments
Fixed income (time-deposit, zero
coupon bonds, commercial papers)
U.S. Sovereign Bills
Certificates of deposits
Commercial papers
Other notes
Bonds and other fixed income
U.S. government securities
Non-U.S. government securities
Corporates securities
Mutual Fund
Derivative financial instruments
Other Investments Non-current
Bonds and other fixed income
Other investments
Trade receivables
Receivables C and NC
Other receivables
Other receivables (non-financial)
Total
Liabilities
Borrowings C and NC
Other liabilities C and NC (*)
Other liabilities
Other liabilities (non-financial)
Trade payables
Lease Liabilities C and NC
Derivative financial instruments
Total
Carrying
amount
Measurement Categories
At Fair Value
Amortized
Cost
FVOCI
FVPL
Level 1
Level 2
Level 3
1,637,821 1,414,397
896,166
1,969,631
-
834,281
223,424 223,424
239,184 1,073,465
896,166
282,225
334,637
196,708
82,596
896,166
282,225
334,637
196,708
82,596
834,281
126,399
10,943
696,939
239,184
9,801
405,631
398,220
7,411
-
-
-
-
-
-
-
-
-
2,480,889 2,480,889
93,144
93,144
414,778
93,144
321,634
-
-
-
-
-
-
834,281
126,399
10,943
696,939
-
-
398,220
398,220
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
- 834,281
126,399
-
10,943
-
696,939
239,184 239,184
-
9,801
7,411 398,220
398,220
-
7,411
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
9,801
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
7,411
-
7,411
-
-
-
-
4,884,596
1,232,501
479,820 1,695,109
9,801
7,411
583,437
693,913
86,240
607,673
583,437
-
-
-
1,107,567 1,107,567
134,433
134,433
11,150
-
1,825,437
-
-
-
-
-
-
-
-
-
86,240
86,240
-
-
-
11,150
97,390
-
-
-
-
-
-
-
-
-
-
-
-
- 11,150
11,150
-
-
86,240
86,240
-
-
-
-
86,240
(*) Includes liability related to share buyback program. See note 37 to these Consolidated Financial Statements.
164
Consolidated Financial Statements
For the years ended 2023, 2022 and 2021 - all amounts in thousands of U.S. dollars, unless otherwise stated
Amortized
Cost
668,668
196,152
196,152
36,167
19,785
140,200
-
-
-
-
-
-
-
-
2,493,940
105,397
105,397
-
December 31, 2022
Assets
Cash and cash equivalents
Other investments
Fixed income (time-deposit, zero
coupon bonds, commercial papers)
Certificates of deposits
Commercial papers
Other notes
Bonds and other fixed income
Non-U.S. government securities
Corporates securities
Mutual Fund
Derivative financial instruments
Other Investments Non-current
Bonds and other fixed income
Other investments
Trade receivables
Receivables C and NC (*)
Other receivables
Other receivables (non-financial)
Total
Liabilities
Borrowings C and NC
Trade payables
Lease Liabilities C and NC
Derivative financial instruments
Total
Carrying
amount
1,091,527
438,448
196,152
36,167
19,785
140,200
211,953
108,310
103,643
30,343
30,805
119,902
113,574
6,328
2,493,940
395,531
154,056
241,475
728,762
1,179,457
112,177
7,127
Measurement Categories
At Fair Value
FVOCI
FVPL
Level 1
Level 2
Level 3
-
182,988
422,859 422,859
59,308 242,296
-
-
-
-
-
-
-
-
28,965 211,953
108,310
28,965
103,643
30,343
-
30,343
30,805
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
- 30,805
6,328 113,574
113,574
-
6,328
-
-
-
-
-
-
-
-
-
6,328
6,328
-
-
-
-
-
- 48,659
-
48,659
-
-
-
-
-
-
-
182,988
79,345
103,643
-
-
113,574
113,574
-
-
48,659
48,659
-
3,464,157
345,221
519,300
778,729
30,805
54,987
728,762
1,179,457
112,177
-
2,020,396
-
-
-
-
-
-
-
-
7,127
7,127
-
-
-
-
-
-
-
-
7,127
7,127
-
-
-
-
-
(*) Includes balances related to interest in Venezuelan companies. See note 35 to these Consolidated Financial Statements.
There were no transfers between levels during the year.
The fair value of financial instruments traded in active markets is based on quoted market prices at the reporting
date. A market is regarded as active if quoted prices are readily and regularly available from an exchange, dealer,
broker, industry group, pricing service, or regulatory agency, and those prices represent actual and regularly
occurring market transactions on an arm’s length basis. The quoted market price used for financial assets held by
Tenaris is the current bid price. These instruments are included in Level 1 and comprise primarily corporate and
sovereign debt securities.
The fair value of financial instruments that are not traded in an active market (such as certain debt securities,
certificates of deposits with original maturity of more than three months, forward and interest rate derivative
instruments) is determined by using valuation techniques which maximize the use of observable market data when
available and rely as little as possible on entity specific estimates. If all significant inputs required to value an
instrument are observable, the instrument is included in Level 2. Tenaris values its assets and liabilities included in
this level using bid prices, interest rate curves, broker quotations, current exchange rates, forward rates and implied
volatilities obtained from market contributors as of the valuation date.
If one or more of the significant inputs are not based on observable market data, the instruments are included in
Level 3. Tenaris values its assets and liabilities in this level using observable market inputs and management
assumptions which reflect the Company’s best estimate on how market participants would price the asset or liability
at measurement date. Main balances in this level include a liability related to the shares to be settled under the
share buyback program recognized during the period. For more information see note 37.
The following table presents the changes in Level 3 assets:
At the beginning of the year
Decrease (*)
Currency translation adjustment and others
At the end of the year
(*) For 2023, related to the sale of Venezuela awards. For more information see notes 6 and 35.
165
Year ended December 31,
2022
2023
54,987
(47,467)
(109)
7,411
56,294
(1,126)
(181)
54,987
Consolidated Financial Statements
For the years ended 2023, 2022 and 2021 - all amounts in thousands of U.S. dollars, unless otherwise stated
C. Fair value estimation
Financial assets or liabilities classified at fair value through profit or loss are measured under the framework
established by the IASB accounting guidance for fair value measurements and disclosures.
The fair values of quoted investments are generally based on current bid prices. If the market for a financial asset is
not active or no market is available, fair values are established using standard valuation techniques.
The fair value of all outstanding derivatives is determined using specific pricing models that include inputs that are
observable in the market or can be derived from or corroborated by observable data. The fair value of forward
foreign exchange contracts is calculated as the net present value of the estimated future cash flows in each currency,
based on observable yield curves, converted into U.S. dollars at the spot rate of the valuation date.
Borrowings are classified under other financial liabilities and measured at their amortized cost. Tenaris estimates
that the fair value of its main financial liabilities is approximately 99.8% and 99.2% of its carrying amount (including
interests accrued) in 2023 and 2022 respectively. Fair values were calculated using standard valuation techniques
for floating rate instruments and comparable market rates for discounting cash flows.
The carrying amount of investments valuated at amortized cost approximates its fair value.
D. Accounting for derivative financial instruments and hedging activities
Derivative financial instruments are initially recognized in the statement of financial position at fair value through
profit and loss on each date a derivative contract is entered into and are subsequently remeasured at fair value.
Specific tools are used for calculation of each instrument’s fair value and these tools are tested for consistency on
a monthly basis. Market rates are used for all pricing operations. These include exchange rates, deposit rates and
other discount rates matching the nature of each underlying risk.
As a general rule, Tenaris recognizes the full amount related to the change in fair value of derivative financial
instruments in Financial Results in the Consolidated Income Statement.
Tenaris designates certain derivatives as hedges of particular risks associated with recognized assets or liabilities or
highly probable forecast transactions. These transactions are classified as cash flow hedges. The effective portion of
the fair value of derivatives that are designated and qualify as cash flow hedges is recognized in equity. Amounts
accumulated in equity are then recognized in the income statement in the same period as the offsetting losses and
gains on the hedged item. The gain or loss relating to the ineffective portion is recognized immediately in the
income statement. The fair value of Tenaris’s derivative financial instruments (assets or liabilities) continues to be
reflected in the statement of financial position.
For transactions designated and qualifying for hedge accounting, Tenaris documents at the inception of the
transaction the relationship between hedging instruments and hedged items, as well as its risk management
objectives and strategy for undertaking various hedge transactions. Tenaris also documents its assessment on an
ongoing basis, of whether the hedging instruments are highly effective in offsetting changes in the fair value or
cash flow of hedged items. At December 31, 2023 and 2022, the effective portion of designated cash flow hedges
which is included in Other Reserves in equity amounted to $8.1 million credit and $13.1 million credit respectively.
The fair values of various derivative instruments used for hedging purposes and the movements of the hedging
reserve included within Other Reserves in equity are disclosed in note 26 to these Consolidated Financial Statements.
166
Consolidated Financial Statements
For the years ended 2023, 2022 and 2021 - all amounts in thousands of U.S. dollars, unless otherwise stated
IV. OTHER NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1
Segment information
As mentioned in section II.C, the Segment Information is disclosed as follows:
Reportable operating segments
(All amounts in millions of U.S. dollars)
Year ended December 31, 2023
Management view - operating income
Difference in cost of sales
Differences in selling, general and administrative expenses
Differences in other operating income (expenses), net
IFRS - operating income
Financial income (expense), net
Income before equity in earnings of non-consolidated companies and income tax
Equity in earnings of non-consolidated companies
Income before income tax
Net Sales
Depreciation and amortization
Year ended December 31, 2022
Management view - operating income
Difference in cost of sales
Differences in depreciation and amortization
Differences in selling, general and administrative expenses
Differences in other operating income (expenses), net
IFRS - operating income
Financial income (expense), net
Income before equity in earnings of non-consolidated companies and income tax
Equity in earnings of non-consolidated companies
Income before income tax
Net Sales
Depreciation and amortization
Year ended December 31, 2021
Management view - operating income
Difference in cost of sales
Differences in depreciation and amortization
Differences in other operating income (expenses), net
IFRS - operating income
Financial income (expense), net
Income before equity in earnings of non-consolidated companies and income tax
Equity in earnings of non-consolidated companies
Income before income tax
Net Sales
Depreciation and amortization
Tubes
Other
Total
4,337
129
14,185
518
684
31
4,466
(134)
(7)
(9)
4,316
221
4,537
95
4,633
14,869
549
Tubes
Other
Total
2,772
75
11,133
588
630
20
2,847
44
2
(4)
74
2,963
(6)
2,957
209
3,166
11,763
608
Tubes
Other
Total
178
65
5,994
575
528
20
243
473
(1)
(8)
707
23
730
513
1,243
6,521
595
Transactions between segments, which were eliminated in consolidation, are mainly related to sales of scrap,
energy, surplus raw materials and others from the Other segment to the Tubes segment for $98.5 million, $77.9
million and $45.6 million in 2023, 2022 and 2021, respectively.
There are no material differences between IFRS and management view in total revenues and by reportable
segments.
The differences between operating income under IFRS view and the management view are mainly related to the
cost of goods sold, reflecting the effect of raw materials prices increases on the valuation of the replacement cost
considered for management view compared to IFRS cost calculated at historical cost on a FIFO basis, and other
minor timing differences.
167
Consolidated Financial Statements
For the years ended 2023, 2022 and 2021 - all amounts in thousands of U.S. dollars, unless otherwise stated
The main difference in Other operating income (expenses), net, for the year ended December 31, 2022, is
attributable to the effect of the reclassification of the currency translation adjustment reserve related to NKK Tubes’
definitive cease of operations, not impacting the management view.
In addition to the amounts reconciled above, the main differences in net income arise from the impact of functional
currencies on financial result, deferred income taxes as well as the result of investment in non-consolidated
companies.
Geographical information
North
America
South
America
Europe
Asia Pacific,
Middle East
and Africa (*)
Unallocated
(**)
Total
Year ended December 31, 2023
Net sales
Total assets
Trade receivables, net
Property, plant and equipment, net
Capital expenditures
Depreciation and amortization
Year ended December 31, 2022
Net sales
Total assets
Trade receivables, net
Property, plant and equipment, net
Capital expenditures
Depreciation and amortization
Year ended December 31, 2021
Net sales
Total assets
Trade receivables, net
Property, plant and equipment, net
Capital expenditures
Depreciation and amortization
7,765,130
11,210,620
1,222,635
3,676,352
214,932
307,139
6,902,787
9,018,386
1,371,717
3,548,844
118,644
348,550
3,360,345
7,992,946
652,483
3,805,912
106,118
307,116
3,382,495
3,751,121
447,379
1,143,752
246,061
115,156
2,550,402
3,896,403
583,223
1,031,423
176,448
125,324
1,311,279
2,399,448
234,800
984,413
63,723
125,781
1,175,581
2,839,378
278,077
794,242
119,820
74,862
1,000,833
2,071,624
202,753
706,539
62,143
76,631
742,463
1,727,573
180,515
742,461
43,344
89,667
2,545,654
1,671,972
532,798
463,833
38,632
51,353
1,308,504
1,023,187
336,247
269,457
21,211
57,218
1,107,120
945,690
231,274
292,015
26,333
72,157
1,608,804
- 14,868,860
21,081,895
2,480,889
6,078,179
619,445
548,510
-
-
-
-
1,540,646
- 11,762,526
17,550,246
2,493,940
5,556,263
378,446
607,723
-
-
-
-
-
1,383,774
-
-
-
-
6,521,207
14,449,431
1,299,072
5,824,801
239,518
594,721
(*) Starting on January 1, 2023, Asia Pacific and Middle East and Africa segments were merged in a single geographical segment.
(**) For 2023, 2022 and 2021 includes Investments in non-consolidated companies. See note 14 to these Consolidated Financial Statements.
There are no revenues from external customers attributable to the Company’s country of incorporation
(Luxembourg).
The principal countries from which the Company derives its revenues are USA (39%), Argentina (15%), Mexico,
Canada, Saudi Arabia and Brazil.
Revenue is mainly recognized at a point in time to direct customers, when control has been transferred and there
is no unfulfilled performance obligation that could affect the acceptance of the product by the customer. Revenues
related to governmental institutions represent approximately 26%, 22% and 23% in 2023, 2022 and 2021
respectively.
Tubes segment revenues by market:
(All amounts in millions of U.S. dollars)
Revenues Tubes
Oil & gas
Oil & gas processing plants
Industrial, power and others
Total
2023
12,488
818
879
14,185
2022
9,543
738
852
11,133
2021
4,895
459
640
5,994
At December 31, 2023, 2022 and 2021, the Company recognized contract liabilities related to customer advances
in the amount of $263.7 million, $242.9 million and $92.4 million, respectively. Each of these amounts are
reclassified to revenues during the subsequent years. In these periods, no significant adjustments in revenues were
performed related to previously satisfied performance obligations.
168
Consolidated Financial Statements
For the years ended 2023, 2022 and 2021 - all amounts in thousands of U.S. dollars, unless otherwise stated
2
Cost of sales
Inventories at the beginning of the year
Increase in inventory due to business combinations (*)
Decrease in inventory due to sale of subsidiaries
Plus: Charges of the year
Raw materials, energy, consumables and other
Services and fees
Labor cost
Depreciation of property, plant and equipment
Amortization of intangible assets
Depreciation of right-of-use assets
Maintenance expenses
Allowance for obsolescence
Taxes
Other
Less: Inventories at the end of the year
Year ended December 31,
2022
2,672,593
2023
3,986,929
107,588
-
5,277,507
437,804
1,403,546
424,373
11,582
30,352
408,410
13,581
272,120
216,220
8,603,083
(3,921,097)
8,668,915
-
-
5,772,031
293,490
1,160,085
465,849
11,754
33,244
267,294
24,901
194,736
178,691
8,402,075
(3,986,929)
7,087,739
2021
1,636,673
-
(10,662)
3,841,551
208,472
824,071
448,843
7,645
35,910
129,350
23,296
40,887
98,159
5,647,522
(2,672,593)
4,611,602
(*) Related to the GPC, Isoplus anticorrosion coating division and Mattr’s pipe coating business unit acquisitions. For more information see note
34.
3
Selling, general and administrative expenses
Services and fees
Labor cost
Depreciation of property, plant and equipment
Amortization of intangible assets
Depreciation of right-of-use assets
Freights and other selling expenses
Provisions for contingencies
Allowances for doubtful accounts
Taxes
Other
2023
Year ended December 31,
2022
2021
163,723
652,820
21,517
40,761
19,925
696,705
38,899
3,590
170,484
110,883
1,919,307
148,331
518,500
21,883
59,018
15,975
641,812
20,606
(223)
121,410
87,263
1,634,575
115,303
426,414
22,924
63,874
15,525
415,895
24,998
(4,297)
78,800
47,133
1,206,569
4
Labor costs (included in Cost of sales and in Selling, general and administrative expenses)
Wages, salaries and social security costs
Severance indemnities
Post-employment benefits - defined contribution plans
Post-employment benefits - defined benefit plans
Employee retention and long-term incentive program
2023
1,943,825
26,470
15,055
19,452
51,564
2,056,366
Year ended December 31,
2022
1,594,200
29,070
13,256
16,320
25,739
1,678,585
2021
1,170,562
28,625
12,608
13,353
25,337
1,250,485
169
Consolidated Financial Statements
For the years ended 2023, 2022 and 2021 - all amounts in thousands of U.S. dollars, unless otherwise stated
The following table shows the geographical distribution of the employees:
Mexico
Argentina
USA
Italy
Romania
Indonesia
Brazil
Canada
Colombia
Saudi Arabia
Other
2023
2022
2021
7,500
6,267
3,882
2,187
1,884
1,573
1,492
1,195
1,112
849
1,193
29,134
5,919
6,444
3,509
2,136
1,847
495
1,460
944
1,183
427
928
25,292
5,474
5,169
2,684
2,011
1,725
506
1,817
758
1,009
408
1,215
22,776
5
Impairment charge
Tenaris’s main source of revenue is the sale of products and services to the oil and gas industry, and the level of
such sales is sensitive to international oil and gas prices and their impact on drilling activities.
The Company conducts regular assessments of the carrying values of its assets. The recoverable value is based on
the value in use. The main key assumptions used in estimating the value in use are discount rate, growth rate and
competitive, economic and regulatory factors applied to determine cash flow projections, such as oil and gas prices,
average number of active oil and gas drilling rigs (rig count) and raw material costs.
For purposes of assessing key assumptions, to estimate discounted future cash flows, the Company uses external
sources of information and management judgment based on past experience and expectations. Management has
determined the value of each of the key assumptions as follows:
- Discount rate: based on the applicable weighted average cost of capital (“WACC”), which is considered to be a
good indicator of capital cost, taking into account the industry, country and size of the business. For each CGU
where assets are allocated, a specific WACC was determined.
- Growth rate: considers mainly the inflation impact on prices and costs, the long-term evolution of the oil and gas
industry, the higher demand to offset depletion of existing fields and the Company’s expected market penetration.
In 2023, a nominal growth rate of 2% was considered.
- Oil and gas prices: based on industry analysts’ reports and management’s expectations of market development.
- Rig count: based on information published by Baker Hughes and management’s expectations.
- Raw material costs: based on industry analysts’ reports and management’s expectations.
Considering that the recoverable amount of the cash-generating units obtained in prior years' tests and that the
assets and liabilities making up those units have not changed significantly, nor the key assumptions mentioned
above, the Company concluded that impairment tests for previous years are still valid as of the end of the reporting
period. In addition, the Company has considered the impact of updating the main discount rates, applying rates in
a range between 12.5% and 21.4% for the CGUs under analysis. Based on the facts mentioned above, the
Company concluded that no impairment charge shall be recognized for the year 2023.
In December 2022, in the presence of impairment indicators, the Company conducted impairment tests and
reviewed the values of certain idle assets in its subsidiaries. The aforementioned analysis resulted in impairment
charges of $76.7 million, allocated in $63.1 million to the Tubes segment and $13.6 million to the Other segment.
The main discount rates used were in a range between 13.4% and 20.2%. In 2022, a nominal growth rate of 2%
was considered.
170
Consolidated Financial Statements
For the years ended 2023, 2022 and 2021 - all amounts in thousands of U.S. dollars, unless otherwise stated
In December 2021, as a result of the expected termination of the NKKTubes joint venture, which at the time
represented an impairment indicator for its assets, an impairment test was conducted, resulting in a charge of $57
million that totally reduced the carrying amounts of property, plant and equipment and intangible assets. The total
amount was allocated to the Tubes segment. The main discount rates used were in a range between 10.9% and
18.8%. In 2021, a nominal growth rate of 2% was considered.
6
Other operating income and expenses
Other operating income
Net income from other sales
Net rents
Reclassification of currency translation adjustment reserve
Tax recovery in Brazilian subsidiaries
Bargain purchase gain
Result on sale of Venezuela awards
Recovery on allowance for doubtful receivables
Other income
Other operating expenses
Contributions to welfare projects and non-profit organizations
Allowance for doubtful receivables
Securities Exchange Commission investigation settlement
Other expense
Other income, net
2023
Year ended December 31,
2022
2021
10,960
4,702
878
-
3,162
33,341
-
-
53,043
15,538
107
-
1,628
17,273
35,770
28,161
5,084
71,252
-
-
-
-
-
104,497
13,668
346
78,100
12,595
104,709
(212)
10,694
5,314
-
35,568
-
-
379
16,290
68,245
6,697
-
-
-
6,697
61,548
Reclassification of currency translation adjustment reserve: During 2022, as result of NKKTubes’ definitive cease of
operations, the currency translation adjustment reserve belonging to the shareholders was reclassified to the income
statement. For more information see note 36.
Tax recovery in Brazilian subsidiaries: On May 13, 2021, the Brazilian Supreme Court issued a final judgment
confirming that in calculating PIS and COFINS (Federal Social Contributions on Gross Revenues), tax payers should
exclude from its base the total output of ICMS, calculated on a gross basis. This decision led to a recognition of
approximately $53 million tax credit in Brazilian subsidiaries, out of which $36 million were recognized in other
operating income and $17 million in financial results (impacting in Finance Income and Finance Cost). In addition
the tax charge related to this gain amounted to $12 million.
Bargain purchase gain: This gain relates to the Isoplus anticorrosion coating division acquisition. For more
information see note 34 “Business Combinations - Acquisition of Anticorrosion Coating Assets in Italy”.
Result on sale of Venezuela awards: For more information see note 35.
Other income: On November 1, 2021, Tenaris sold 100% of the shares of Geneva Structural Tubes LLC (“Geneva”)
to MKK USA Inc., a subsidiary of Maruichi Steel Tube Ltd of Japan for an aggregate price of $24.3 million. The gain
of this transaction amounted to approximately $6.8 million.
Securities Exchange Commission investigation settlement: For more information see note 27 “Contingencies,
commitments and restrictions to the distribution of profits - Contingencies - Petrobras-related proceedings and
claims”.
171
Consolidated Financial Statements
For the years ended 2023, 2022 and 2021 - all amounts in thousands of U.S. dollars, unless otherwise stated
7
Financial results
Interest income
Net result on changes in FV of financial assets at FVPL
Finance income
Finance cost
Net foreign exchange transactions results
Net foreign exchange derivatives contracts results
Other
Other financial results, net
Net financial results
2023
Year ended December 31,
2022
2021
201,852
11,622
213,474
(106,862)
218,383
(8,974)
(95,044)
114,365
220,977
86,112
(6,092)
80,020
(45,940)
15,654
(25,666)
(30,108)
(40,120)
(6,040)
38,048
-
38,048
(23,677)
17,287
(7,966)
(1,026)
8,295
22,666
Finance Income: In 2023, 2022 and 2021 includes $61.2 million, $33.0 million and $3.3 million of interest related
to instruments carried at FVPL, respectively.
In 2022 also includes a realized loss of $10.5 million related to the change in FV of certain financial instruments
obtained in an operation of settlement of trade receivables.
In 2021 also includes $18.0 million of non-financial interest related to PIS and COFINS taxes recovery in Brazilian
subsidiaries. For more information, see note 6 to these Consolidated Financial Statements.
Net foreign exchange transactions results: In 2023 mainly includes result from the Argentine peso depreciation
against the U.S. dollar on Argentine peso denominated net financial position at subsidiaries with functional currency
U.S. dollar, the Brazilian real appreciation against the U.S. dollar on Brazilian denominated net financial position at
subsidiaries with functional currency U.S. dollar, together with the result from Euro appreciation against the U.S.
dollar on Euro denominated intercompany liabilities in subsidiaries with functional currency U.S. dollar, offset by an
increase in currency translation adjustment reserve from an Italian subsidiary.
In 2022 mainly includes result from the Argentine peso and Japanese yen depreciation against the U.S. dollar on
Argentine peso and Japanese yen denominated net financial position at subsidiaries with functional currency U.S.
dollar, together with the result from Euro depreciation against the U.S. dollar on Euro denominated intercompany
liabilities in subsidiaries with functional currency U.S. dollar, largely offset by an increase in currency translation
adjustment reserve from an Italian subsidiary.
In 2021 mainly includes the result from Euro depreciation against the U.S. dollar on Euro denominated intercompany
liabilities in subsidiaries with functional currency U.S. dollar, largely offset by an increase in currency translation
adjustment reserve from an Italian subsidiary, together with the result from the Argentine peso and Japanese yen
depreciation against the U.S. dollar on Argentine peso and Japanese yen denominated net financial position at
subsidiaries with functional currency U.S. dollar.
Net foreign exchange derivatives contracts results: In 2023 includes mainly losses on derivatives covering net
receivables in Brazilian real.
In 2022 includes mainly losses on derivatives covering net receivables in Brazilian real and net liabilities in Euro and
Japanese yen.
In 2021 includes mainly losses on derivatives covering net liabilities in Euro and Japanese yen, partially offset by
gains on derivatives covering net receivables in Brazilian real.
Other: In 2023 includes a net loss of $94.7 million related to the transfer of Argentine sovereign bonds paid as
dividend in kind from an Argentinian subsidiary to its shareholders. For more information see note 29.
In 2022 includes a loss of $29.8 million related to the transfer of Argentine sovereign bonds paid as dividend in
kind from an Argentinian subsidiary to its shareholders.
172
Consolidated Financial Statements
For the years ended 2023, 2022 and 2021 - all amounts in thousands of U.S. dollars, unless otherwise stated
8
Equity in earnings of non-consolidated companies
Year ended December 31,
2022
2023
2021
From non-consolidated companies
Remeasurement of previously held interest
Bargain purchase gain
Impairment loss on non-consolidated companies
Net loss related to participation increase in Usiminas
242,743
512,591
104,897
4,506
11,487
(25,486)
95,404
-
(34,041)
-
-
-
208,702
512,591
-
-
-
-
Remeasurement of previously held interest and Bargain purchase gain: For year ended December 31, 2023, include
$4.5 million and $11.5 million related to GPC acquisition. For more information see note 34 “Business Combinations
- Acquisition of Global Pipe Company”.
Impairment loss on non-consolidated companies: For year ended December 31, 2022, $19.1 related to the
investment in Usiminas and $14.9 related to the joint venture with PAO Severstal (“Severstal”).
Net loss related to participation increase in Usiminas: For more information see note 14 “Investments in non-
consolidated companies - Usiminas”.
9
Income tax
Current tax
Deferred tax
Tax charge
2023
Year ended December 31,
2022
(868,695)
193,739
(674,956)
(589,706)
(27,530)
(617,236)
2021
(215,467)
26,019
(189,448)
No current tax impacts have arisen in the current Consolidated Financial Statements as of December 31, 2023, due
to the application of Pillar Two rules, as they will be applicable as from 2024 in jurisdictions relevant for the
Company.
In addition, the Company has applied the exception prescribed by the amendments to IAS 12, and therefore it has
not recognized any deferred tax impact from the Pillar Two application.
The Company is in the process of assessing its exposure to the Pillar Two legislation and testing its situation under
the OECD transitional safe harbour rules and expects no major impacts in relation to top-up tax due to the
application of one or more of the transitional safe harbour rules.
Due to the complexities in applying the legislation and calculating GloBE income, the quantitative impact of the
enacted legislation is not yet reasonably estimable.
The tax on Tenaris’s income before tax differs from the theoretical amount that would arise using the tax rate in
each country as follows:
Income before income tax
Less impairment charges (non-deductible)
Income before income tax without impairment charges
Tax calculated at the tax rate in each country
Effect of currency translation on tax base
Changes in the tax rates
Utilization of previously unrecognized tax losses
Tax revaluation, withholding tax and others
Tax charges
173
2023
4,632,789
Year ended December 31,
2022
3,165,937
-
-
4,632,789
3,165,937
(1,127,428)
(346,573)
1,535
787
796,723
(674,956)
(705,727)
(187,186)
(3,422)
29,560
249,539
(617,236)
2021
1,242,766
57,075
1,299,841
(209,765)
(76,043)
(29,881)
966
125,275
(189,448)
Consolidated Financial Statements
For the years ended 2023, 2022 and 2021 - all amounts in thousands of U.S. dollars, unless otherwise stated
Effect of currency translation on tax base: Tenaris applies the liability method to recognize deferred income tax on
temporary differences between the tax bases of assets / liabilities and their carrying amounts in the financial
statements. By application of this method, Tenaris recognizes gains and losses on deferred income tax due to the
effect of the change in the value on the tax bases in subsidiaries (mainly Argentina and Mexico), which have a
functional currency different than their local currency. These gains and losses are required by IFRS even though the
revalued / devalued tax bases of the relevant assets will not result in any deduction / obligation for tax purposes in
future periods.
Changes in the tax rates: For the year 2021, includes mainly the effect of the increase in the corporate income tax
rate in Argentina from 25% to 35%.
Tax revaluation, withholding tax and others: Includes a net tax income of $349.0 million, $250.4 million and $113.2
million for 2023, 2022 and 2021 respectively related to the tax revaluation regimes in Argentina and Mexico. It also
includes a charge of $164.3 million, $21.0 million and $22.6 million for 2023, 2022 and 2021 respectively related
to withholding taxes for intra-group international operations. Additionally, it includes $550.3 million tax income for
2023 related to the recognition deferred tax assets due to previous years’ tax losses carried forward in Luxembourg.
For more information see note 22.
10
Dividends distribution
On November 1, 2023, the Company’s Board of Directors approved an interim dividend of $0.20 per outstanding
share ($0.40 per ADS), or approximately $235 million, paid on November 22, 2023, with an ex-dividend date of
November 20, 2023.
On May 3, 2023, the Company’s shareholders approved an annual dividend in the amount of $0.51 per share
($1.02 per ADS). The amount approved by the shareholders included the interim dividend previously paid on
November 23, 2022 in the amount of $0.17 per share ($0.34 per ADS). The balance, amounting to $0.34 per share
($0.68 per ADS), was paid on May 24, 2023, for an amount of approximately $401 million. In the aggregate, the
interim dividend paid in November 2022 and the balance paid in May 2023 amounted to approximately $602
million.
On May 3, 2022, the Company’s shareholders approved an annual dividend in the amount of $0.41 per share
($0.82 per ADS). The amount approved included the interim dividend previously paid on November 24, 2021 in the
amount of $0.13 per share ($0.26 per ADS). The balance, amounting to $0.28 per share ($0.56 per ADS), was paid
on May 25, 2022, for an amount of approximately $331 million. In the aggregate, the interim dividend paid in
November 2021 and the balance paid in May 2022 amounted to approximately $484 million.
174
Consolidated Financial Statements
For the years ended 2023, 2022 and 2021 - all amounts in thousands of U.S. dollars, unless otherwise stated
11
Property, plant and equipment, net
Year ended December 31, 2023
Cost
Values at the beginning of the year
Currency translation adjustment
Increase due to business combinations (*)
Additions
Transfers / Reclassifications
Disposals / Consumptions
Values at the end of the year
Depreciation and impairment
Accumulated at the beginning of the year
Currency translation adjustment
Depreciation charge
Transfers / Reclassifications
Disposals / Consumptions
Accumulated at the end of the year
At December 31, 2023
Land and
civil
buildings
Industrial
buildings,
plant and
production
equipment
Vehicles,
furniture
and
fixtures
Work in
progress
Spare
parts and
equipment
Total
815,763 12,857,494
53,282
256,899
3,661
435,550
(68,613)
889,957 13,538,273
1,863
64,413
330
12,031
(4,443)
402,485
1,675
831
820
22,530
(11,428)
416,913
252,379
1,462
71,838
546,515
(471,381)
(4,710)
396,103
-
199
19,671
55,526 14,383,647
58,481
393,981
570,997
(1,270)
(3,562)
(92,756)
71,834 15,313,080
-
152,272
390
12,256
(16)
(8)
164,894
725,063
8,313,971
38,074
411,861
(391)
(67,471)
8,696,044
4,842,229
340,526
1,584
19,839
27
(10,667)
351,309
65,604
-
-
-
-
-
-
396,103
20,615
105
1,934
-
-
22,654
49,180
8,827,384
40,153
445,890
(380)
(78,146)
9,234,901
6,078,179
(*) Related to the GPC, Isoplus anticorrosion coating division, Republic Tube LLC’s OCTG pipe processing facility and Mattr’s pipe coating business
unit acquisitions. For more information see note 34.
Land and
civil
buildings
Industrial
buildings,
plant and
production
equipment
Vehicles,
furniture
and
fixtures
830,104 13,064,541
(71,347)
(1,601)
420,930
(1,838)
-
-
-
-
2,271
9,829
184,915
(322,886)
(22,569)
815,763 12,857,494
Work in
progress
Spare
parts and
equipment
Total
147,429
376
187
334,912
(227,153)
(3,372)
252,379
-
(174)
59,522 14,522,526
(74,584)
187
346,067
(16,188)
(394,361)
55,526 14,383,647
8,150
-
(11,972)
-
-
-
-
-
-
-
252,379
4,421
130
20,485
-
-
(4,421)
20,615
34,911
8,697,725
(53,198)
487,732
(21,723)
76,043
(359,195)
8,827,384
5,556,263
734
16,221
(33,562)
402,485
353,639
(1,756)
21,022
(215)
321
(32,485)
340,526
61,959
Year ended December 31, 2022
Cost
Values at the beginning of the year
Currency translation adjustment
Increase due to business combinations (*)
Additions
Transfers / Reclassifications
Disposals / Consumptions
Values at the end of the year
Depreciation and impairment
Accumulated at the beginning of the year
Currency translation adjustment
Depreciation charge
Transfers / Reclassifications
Impairment charge (See note 5)
Disposals / Consumptions
Accumulated at the end of the year
At December 31, 2022
139,941
(289)
13,577
(2)
-
(955)
152,272
663,491
8,199,724
(51,283)
432,648
(21,506)
75,722
(321,334)
8,313,971
4,543,523
(*) Related to Parques Eólicos de la Buena Ventura S.A. acquisition.
See note 28 for a description of certain restricted assets with a carrying value of $56.2 million held in Saudi Arabia
by the Company’s subsidiary SSPC, in which Tenaris holds a 47.79% interest.
Property, plant and equipment include capitalized interests for net amounts at December 31, 2023 and 2022 of
$28.8 million and $30.4 million, respectively. There were no new interests capitalized during 2023 and 2022.
Government grants recognized as a reduction of property, plant and equipment were not material for the years
2023 and 2022.
For the year 2023, the carrying amount of assets pledged as security for current and non-current borrowings
amounted to $89.6 million held in Saudi Arabia by the Company´s subsidiary GPC, in which SSPC holds a 57.3%
interest.
175
Consolidated Financial Statements
For the years ended 2023, 2022 and 2021 - all amounts in thousands of U.S. dollars, unless otherwise stated
For the year 2022, the carrying amount of assets pledged as security for current and non-current borrowings were
not material.
12
Intangible assets, net
Year ended December 31, 2023
Cost
Values at the beginning of the year
Currency translation adjustment
Increase due to business combinations (**)
Additions
Transfers / Reclassifications
Disposals
Values at the end of the year
Amortization and impairment
Accumulated at the beginning of the
year
Currency translation adjustment
Amortization charge
Transfers / Reclassifications
Disposals
Accumulated at the end of the year
At December 31, 2023
(*) Includes Proprietary Technology.
Information
system
projects
Licenses,
patents and
trademarks (*)
Goodwill
Customer
relationships
Total
614,474
2,233
105
39,375
437
(7,737)
648,887
561,119
2,140
21,285
(86)
(7,736)
576,722
72,165
550,991
2
116
9,073
367
-
2,469,726
39
18,616
1,762,042
-
28,638
-
-
-
-
-
-
560,549
2,488,381
1,790,680
398,417
1
8,799
-
-
1,384,674
1,720,515
-
-
-
-
-
22,259
-
-
407,217
153,332
1,384,674
1,103,707
1,742,774
47,906
5,397,233
2,274
47,475
48,448
804
(7,737)
5,488,497
4,064,725
2,141
52,343
(86)
(7,736)
4,111,387
1,377,110
(**) Related to the GPC, Isoplus anticorrosion coating division, Republic Tube LLC’s OCTG pipe processing facility and Mattr’s pipe coating business
unit acquisitions. For more information see note 34.
Year ended December 31, 2022
Cost
Values at the beginning of the year
Currency translation adjustment
Increase due to business combinations (**)
Additions
Transfers / Reclassifications
Disposals (***)
Values at the end of the year
Amortization and impairment
Accumulated at the beginning of the
year
Currency translation adjustment
Amortization charge
Impairment charge (See note 5)
Disposals (***)
Accumulated at the end of the year
At December 31, 2022
Information
system
projects
Licenses,
patents and
trademarks (*)
Goodwill
Customer
relationships
Total
650,155
(2,626)
-
31,427
(5,535)
(58,947)
614,474
599,307
(2,496)
23,218
2
(58,912)
561,119
53,355
547,527
-
4,019
952
-
(1,507)
550,991
2,468,638
1,088
-
-
-
-
2,469,726
2,211,151
-
-
-
-
(449,109)
1,762,042
391,223
1,383,994
2,130,771
-
8,701
-
(1,507)
398,417
152,574
-
-
680
-
1,384,674
1,085,052
-
38,853
-
(449,109)
1,720,515
41,527
5,877,471
(1,538)
4,019
32,379
(5,535)
(509,563)
5,397,233
4,505,295
(2,496)
70,772
682
(509,528)
4,064,725
1,332,508
(*) Includes Proprietary Technology.
(**) Related to Parques Eólicos de la Buena Ventura S.A. acquisition.
(***) Mainly related to fully depreciated assets following the deconsolidation of a Canadian subsidiary of the Company.
The geographical allocation of goodwill for the year ended December 31, 2023 was $944.2 million for North
America, $111.0 million for South America, $33.0 million for Asia Pacific, Middle East & Africa and $15.5 million
for Europe.
176
Consolidated Financial Statements
For the years ended 2023, 2022 and 2021 - all amounts in thousands of U.S. dollars, unless otherwise stated
The carrying amount of goodwill allocated by CGU, as of December 31, 2023, was as follows:
(all amounts in millions of U.S. dollars)
CGU
Tamsa
Siderca
Hydril
Other
Total
Tubes Segment
Hydril Acquisition
346
265
309
-
920
Other
19
93
-
58
170
Other Segment
Other
Total
-
-
-
14
14
365
358
309
71
1,104
13
Right-of-use assets, net and lease liabilities
Right of use assets evolution
Year ended December 31, 2023
Cost
Opening net book amount
Currency translation adjustment
Increase due to business combinations (*)
Additions
Transfers / Reclassifications
Disposals
At December 31, 2023
Depreciation
Accumulated at the beginning of the year
Currency translation adjustment
Depreciation charge
Transfers / Reclassifications
Disposals
Accumulated at the end of the year
At December 31, 2023
Land and
Civil
Buildings
Industrial
Buildings,
Plant and
Production
Equipment
Vehicles,
furniture and
fixtures
Others
Total
43,570
99
11,803
13,040
691
(2,739)
66,464
18,933
34
9,663
691
(1,349)
27,972
38,492
125,677
243
37
30,066
-
(7,643)
148,380
52,794
134
29,685
-
(7,046)
75,567
72,813
30,291
263
46
15,732
(691)
(2,424)
43,217
17,042
200
10,316
(691)
(1,638)
25,229
17,988
1,182
-
-
2,486
-
-
3,668
210
-
613
-
-
823
2,845
200,720
605
11,886
61,324
-
(12,806)
261,729
88,979
368
50,277
-
(10,033)
129,591
132,138
(*) Related to the GPC and Mattr’s pipe coating business unit acquisitions. For more information see note 34.
Year ended December 31, 2022
Cost
Opening net book amount
Currency translation adjustment
Additions
Transfers / Reclassifications
Disposals
At December 31, 2022
Depreciation
Accumulated at the beginning of the year
Currency translation adjustment
Depreciation charge
Transfers / Reclassifications
Disposals
Accumulated at the end of the year
At December 31, 2022
Land and
Civil
Buildings
Industrial
Buildings,
Plant and
Production
Equipment
Vehicles,
furniture and
fixtures
Others
Total
20,256
(417)
7,674
6,483
(3,705)
30,291
10,684
(251)
7,277
2,543
(3,211)
17,042
13,249
-
-
1,182
-
-
1,182
-
-
210
-
-
210
972
198,154
(779)
56,506
-
(53,161)
200,720
89,416
(399)
49,219
-
(49,257)
88,979
111,741
46,082
52
15,872
(5,166)
(13,270)
43,570
24,005
(9)
8,965
(3,974)
(10,054)
18,933
24,637
131,816
(414)
31,778
(1,317)
(36,186)
125,677
54,727
(139)
32,767
1,431
(35,992)
52,794
72,883
177
Consolidated Financial Statements
For the years ended 2023, 2022 and 2021 - all amounts in thousands of U.S. dollars, unless otherwise stated
Depreciation of right-of-use assets is mainly included in Tubes segment.
Lease liability evolution
Opening net book amount
Increase due to business combinations (*)
Translation differences
Additions
Cancellations
Repayments (**)
Interest accrued
At December 31,
Year ended December 31,
2022
2023
112,177
12,148
2,237
61,310
(2,972)
(54,940)
4,473
134,433
117,285
-
(3,922)
56,459
(5,207)
(55,874)
3,436
112,177
(*) Related to the GPC and Mattr’s pipe coating business unit acquisitions. For more information see note 34.
(**) For 2023 includes repayments of $51.5 million in capital and $3.4 million of interest.
For 2022 includes repayments of $52.4 million in capital and $3.5 million of interest.
As of December 31, 2023, the amount of remaining payments with maturities of less than 1 year, between 2 and
5 years and more than 5 years was approximately 28%, 45% and 27%, respectively.
As of December 31, 2022, the amount of remaining payments with maturities of less than 1 year, between 2 and
5 years and more than 5 years was approximately 25%, 48% and 27%, respectively.
Expenses related to short-term leases, leases of low value assets and variable leases (included in Cost of sales and
Selling, general and administrative expenses) were not material for the years 2023 and 2022.
14
Investments in non-consolidated companies
At the beginning of the year
Translation differences
Equity in earnings of non-consolidated companies
Impairment loss in non-consolidated companies
Dividends and distributions declared
Acquisition of non-consolidated companies
Decrease due to step-acquisition
(Decrease) / increase in equity reserves and others
At the end of the year
Year ended December 31,
2022
2023
1,540,646
110,801
79,411
-
(69,216)
22,661
(23,453)
(52,046)
1,608,804
1,383,774
7,336
242,743
(34,041)
(64,189)
-
-
5,023
1,540,646
Equity in earnings of non-consolidated companies: Includes a loss of $25.5 related to the participation increase in
Usiminas and does not include $4.5 million and $11.5 million related to GPC acquisition since May 17, 2023, which
is the date of its consolidation. For more information see note 34 “Business Combinations - Acquisition of Global
Pipe Company”.
Impairment loss in non-consolidated companies: Includes an impairment of $19.1 million related to the investment
in Usiminas and $14.9 million related to the joint venture with PAO Severstal (“Severstal”).
Dividends and distributions declared: Related to Ternium and Usiminas. During 2023 and 2022 $68.8 million and
$66.2 million respectively were collected.
Acquisition of non-consolidated companies: Related to the investment in Usiminas.
Decrease due to step-acquisition: Related to GPC acquisition. For more information see note 34.
178
Consolidated Financial Statements
For the years ended 2023, 2022 and 2021 - all amounts in thousands of U.S. dollars, unless otherwise stated
The principal non-consolidated companies are:
Company
a) Ternium (*)
b) Usiminas (**)
c) Techgen
d) Global Pipe Company (***)
Others
(*) Including treasury shares.
% ownership at December 31,
Book value at December 31,
Country of incorporation
Luxembourg
Brazil
Mexico
Saudi Arabia
2023
11.46%
3.96%
22.00%
57.30%
2022
11.46%
3.07%
22.00%
35.00%
2023
1,430,616
123,654
53,556
-
978
1,608,804
2022
1,363,607
109,534
41,506
23,022
2,977
1,540,646
(**) At December 31, 2023 the voting rights were 6.76% and at December 31, 2022 were 5.19%.
(***) Consolidated as from May 17, 2023.
a) Ternium
Ternium is a steel producer with production facilities in Mexico, Brazil, Argentina, Colombia, the Southern United
States and Central America and is one of Tenaris’s main suppliers of round steel bars and flat steel products for its
pipes business.
At December 31, 2023, the closing price of Ternium’s ADSs as quoted on the New York Stock Exchange was $42.47
per ADS, giving Tenaris’s ownership stake a market value of approximately $975.6 million. At December 31, 2023,
the carrying value of Tenaris’s ownership stake in Ternium, based on Ternium’s IFRS Financial Statements, was
approximately $1,430.6 million. The Company reviews its participation in Ternium whenever events or
circumstances indicate that the asset’s carrying amount may not be recoverable. As of December 31, 2023, the
Company concluded that the carrying amount does not exceed the recoverable value of the investment.
Summarized selected financial information of Ternium, including the aggregated amounts of assets, liabilities,
revenues and profit or loss is as follows:
Non-current assets
Current assets
Total assets
Non-current liabilities
Current liabilities
Total liabilities
Total equity
Non-controlling interests
Revenues
Gross profit
Net income for the year attributable to shareholders' equity
b) Usiminas
Ternium
2023
12,148,560
12,030,544
24,179,104
3,566,643
3,800,602
7,367,245
16,811,859
4,393,264
17,610,092
3,559,355
676,043
2022
8,647,510
8,844,038
17,491,548
1,506,325
2,216,832
3,723,157
13,768,391
1,922,434
16,414,466
3,927,184
1,767,516
Usiminas is a Brazilian producer of high quality flat steel products used in the energy, automotive and other
industries.
At December 31, 2023, the closing price of the Usiminas’ ordinary and preferred shares, as quoted on the B3 -
Brasil Bolsa Balcão S.A, was BRL9.20 ($1.90) and BRL9.29 ($1.92), respectively, giving Tenaris’s ownership stake a
market value of approximately $92.7 million. As of that date, the carrying value of Tenaris’s ownership stake in
Usiminas was approximately $123.7 million.
Following the acquisition of shares referred to in note II.B.2).b) and considering the carrying value of the previously
held interest, the price paid for the acquisition of the additional Usiminas shares and the fair value measurement of
the Usiminas shares (conducted at the T/T Group level) the Company recorded a net loss of $25.5 million included
in Equity in (losses) earnings of non-consolidated companies in the Consolidated Income Statement.
179
Consolidated Financial Statements
For the years ended 2023, 2022 and 2021 - all amounts in thousands of U.S. dollars, unless otherwise stated
The Company reviews its participation in Usiminas whenever events or circumstances indicate that the asset’s
carrying amount may not be recoverable. As of December 31, 2023, the Company concluded that the carrying
amount did not exceed the recoverable value of the investment.
Summarized selected financial information of Usiminas, including the aggregated amounts of assets, liabilities,
revenues and profit or loss is as follows:
Non-current assets
Current assets
Total assets
Non-current liabilities
Current liabilities
Total liabilities
Total equity
Non-controlling interests
Revenues
Gross profit
Net income for the year attributable to shareholders' equity
c) Techgen
Usiminas
2023
2022
4,591,763
3,589,129
8,180,892
1,672,676
1,139,031
2,811,706
5,369,186
556,418
5,531,985
357,845
278,402
3,764,453
3,901,844
7,666,297
1,671,249
1,033,524
2,704,773
4,961,524
523,741
6,296,964
1,110,439
319,979
Techgen is a Mexican company that operates a natural gas-fired combined cycle electric power plant in the Pesquería
area of the State of Nuevo León, Mexico, with a power capacity of 900 megawatts. As of December 31, 2023,
Tenaris held 22% of Techgen’s share capital, and its affiliates, Ternium and Tecpetrol (both controlled by San
Faustin), beneficially owned 48% and 30% respectively. As of December 31, 2023, the carrying value of Tenaris’s
ownership stake in Techgen was approximately $53.6 million.
Techgen entered into certain transportation capacity agreements and an agreement for the purchase of clean
energy certificates. As of December 31, 2023, Tenaris’s exposure under these agreements amounted to $39.4
million and $16.9 million respectively.
Techgen’s sponsors granted certain subordinated loans to Techgen. As of December 31, 2023, the aggregate
outstanding principal amount under these subordinated loans was $281.3 million, of which $61.9 million
correspond to Tenaris’s contribution.
On February 13, 2019, Techgen entered into a $640 million syndicated loan agreement with several banks to
refinance an existing loan, resulting in the release of certain corporate guarantees previously issued by Techgen’s
shareholders to secure the replaced facility.
The existing syndicated loan agreement is “non-recourse” on the sponsors. Techgen’s obligations thereunder are
guaranteed by a Mexican security trust (covering shares, assets, accounts and contract rights), account pledges and
certain direct agreements –customary for these type of transactions–. The commercial terms and conditions
governing the purchase by the Company’s Mexican subsidiary, Tamsa, of 22% of the energy generated by Techgen
remain substantially unchanged.
Under the loan agreement, Techgen is committed to maintain a debt service reserve account covering debt service
becoming due during two consecutive quarters; such account is funded by stand-by letters of credit issued for the
account of Techgen’s sponsors in proportion to their respective participations in Techgen. Accordingly, the
Company applied for stand-by letters of credit covering 22% of the debt service coverage ratio, which as of
December 31, 2023, amounted to $10.9 million.
180
Consolidated Financial Statements
For the years ended 2023, 2022 and 2021 - all amounts in thousands of U.S. dollars, unless otherwise stated
d) GPC
GPC is a joint venture established in 2010 and located in Jubail, Saudi Arabia, which manufactures LSAW pipes.
Until May 16, 2023, Tenaris, through its subsidiary SSPC, owned 35% of the share capital of GPC and, accordingly,
GPC was a non-consolidated company. On May 17, 2023, SSPC acquired an additional 22.3% interest in GPC
reaching a participation of 57.3%. The Company consolidates GPC’s balances and results of operations as from
May 17, 2023. For more information on GPC acquisition and its accounting treatment see note 34 “Business
Combinations - Global Pipe Company acquisition”.
15
Receivables non-current
Employee advances and loans
Tax credits (*)
Receivables from related parties
Legal deposits
Advances to suppliers and other advances
Receivable Venezuelan subsidiaries
Others
Year ended December 31,
2022
2023
7,395
53,483
69,820
9,355
27,043
-
18,863
185,959
11,908
27,333
67,921
9,394
28,779
48,659
17,726
211,720
(*) As of December 31, 2023, included approximately $40.6 million related to ICMS (Tax on Sales and Services) from Brazilian subsidiaries.
As of December 31, 2022, included approximately $8 million related to PIS and COFINS (Federal Social Contributions on Gross Revenues) tax
recovery from Brazilian subsidiaries.
16
Inventories, net
Finished goods
Goods in process
Raw materials
Supplies
Goods in transit
Allowance for obsolescence, see note 25 (i)
17
Receivables and prepayments, net
Prepaid expenses and other receivables
Government entities
Employee advances and loans
Advances to suppliers and other advances
Government tax refunds on exports
Receivables from related parties
Others
Allowance for other doubtful accounts, see note 25 (i)
181
Year ended December 31,
2022
2023
1,401,754
1,068,956
569,837
648,443
441,217
4,130,207
(209,110)
3,921,097
1,592,706
936,555
606,977
542,636
530,721
4,209,595
(222,666)
3,986,929
Year ended December 31,
2022
2023
104,015
1,330
14,316
48,455
8,210
5,759
50,173
232,258
(3,439)
228,819
47,419
18,121
10,701
41,549
8,898
19,184
41,418
187,290
(3,479)
183,811
Consolidated Financial Statements
For the years ended 2023, 2022 and 2021 - all amounts in thousands of U.S. dollars, unless otherwise stated
18
Current tax assets and liabilities
Current tax assets
Income tax assets
V.A.T. credits
Other prepaid taxes
Current tax liabilities
Income tax liabilities
V.A.T. liabilities
Other taxes
19
Trade receivables, net
Current accounts
Receivables from related parties
Allowance for doubtful accounts, see note 25 (i)
Year ended December 31,
2022
2023
122,257
132,972
1,172
256,401
24,812
218,009
315
243,136
Year ended December 31,
2022
2023
344,565
60,047
83,665
488,277
280,469
17,228
78,543
376,240
Year ended December 31,
2022
2023
2,471,565
58,370
2,529,935
(49,046)
2,480,889
2,479,035
60,400
2,539,435
(45,495)
2,493,940
The following table sets forth details of the aging of trade receivables:
At December 31, 2023
Trade
Receivables
Not Due
Past due
1 - 180 days
> 180 days
Guaranteed
Not guaranteed
Guaranteed and not guaranteed
Expected loss rate
Allowance for doubtful accounts
Nominative allowance for doubtful accounts
Net Value
At December 31, 2022
Guaranteed
Not guaranteed
Guaranteed and not guaranteed
Expected loss rate
Allowance for doubtful accounts
Nominative allowance for doubtful accounts
Net Value
261,113
2,268,822
2,529,935
0.06%
(1,636)
(47,410)
2,480,889
236,714
1,613,626
1,850,340
0.02%
(312)
-
1,850,028
23,991
590,236
614,227
0.18%
(1,249)
(748)
612,230
408
64,960
65,368
0.46%
(75)
(46,662)
18,631
Trade
Receivables
Not Due
Past due
1 - 180 days
> 180 days
265,898
2,273,537
2,539,435
0.06%
(1,657)
(43,838)
2,493,940
237,784
1,756,707
1,994,491
0.03%
(654)
-
1,993,837
27,431
465,423
492,854
0.18%
(920)
(1,541)
490,393
683
51,407
52,090
0.77%
(83)
(42,297)
9,710
Trade receivables are mainly denominated in U.S. dollars.
182
Consolidated Financial Statements
For the years ended 2023, 2022 and 2021 - all amounts in thousands of U.S. dollars, unless otherwise stated
20
Cash and cash equivalents and other investments
Cash and cash equivalents
Cash at banks
Liquidity funds
Short-term investments
Other investments - current
Fixed income (time-deposit, zero coupon bonds, commercial papers)
Bonds and other fixed income
Fund investments
Other investments - non-current
Bonds and other fixed income
Others
21
Borrowings
Non-current
Bank borrowings
Current
Bank borrowings
Bank overdrafts
Costs of issue of debt
Total Borrowings
Year ended December 31,
2022
2023
370,487
223,424
1,043,910
1,637,821
896,166
834,281
239,184
1,969,631
398,220
7,411
405,631
149,424
422,859
519,244
1,091,527
196,152
211,953
30,343
438,448
113,574
6,328
119,902
Year ended December 31,
2022
2023
48,304
48,304
513,909
21,224
-
535,133
583,437
46,433
46,433
682,255
94
(20)
682,329
728,762
The maturity of borrowings is as follows:
At December 31, 2023
1 year or less
1 - 2 years
2 – 3 years
Over 3 years
Total
Borrowings
Total borrowings
Interest to be accrued
Total
535,133
535,133
10,510
545,643
46,804
46,804
3,533
50,337
1,500
1,500
283
1,783
-
-
-
-
583,437
583,437
14,326
597,763
At December 31, 2022
1 year or less
1 - 2 years
2 – 3 years
Over 3 years
Total
Borrowings
Total borrowings
Interest to be accrued (*)
Total
682,329
682,329
26,153
708,482
41,933
41,933
821
42,754
3,000
3,000
64
3,064
1,500
1,500
8
1,508
728,762
728,762
27,046
755,808
(*) Includes the effect of hedge accounting.
183
Consolidated Financial Statements
For the years ended 2023, 2022 and 2021 - all amounts in thousands of U.S. dollars, unless otherwise stated
Significant borrowings include:
In millions of U.S. dollars
Disbursement date
2023
2023
2023
2017
Borrower
Tubos de Acero de Mexico S.A.
Tenaris Tubocaribe Ltda.
Confab Industrial S.A.
Global Pipe Company
Type
Bilateral
Bilateral
Bilateral
Bilateral
Final maturity
Outstanding
2024
2024
2024
2024 / 2025
200
60
40
39
As of December 31, 2023, Tenaris was in compliance with all of its covenants, or obtained the necessary waivers
from the applicable financial institution if the covenants were not met.
The weighted average interest rates before tax shown below were calculated using the rates set for each instrument
in its corresponding currency as of December 31, 2023 and 2022, considering hedge accounting where applicable.
Total borrowings
2023
2022
10.56%
9.45%
Breakdown of long-term borrowings by currency and rate is as follows:
Non-current borrowings
Currency
USD
SAR
SAR
Total non-current borrowings
Current borrowings
Currency
USD
USD
BRL
EUR
MXN
ARS
SAR
SAR
Total current borrowings
Borrowings evolution
At the beginning of the year
Translation differences
Proceeds and repayments, net
Interests accrued less payments
Reclassifications
Increase due to business combinations (*)
Overdrafts variation
At the end of the year
Interest rates
Variable
Fixed
Variable
Interest rates
Variable
Fixed
Variable
Fixed
Fixed
Fixed
Variable
Fixed
Year ended December 31,
2023
2022
20,000
23,803
4,501
48,304
20,000
18,933
7,500
46,433
Year ended December 31,
2023
2022
221,008
111,654
39,947
25,104
-
23,462
3,035
110,923
535,133
200,350
206,336
-
26,829
141,802
74,025
3,023
29,964
682,329
Year ended December 31, 2023
Current
Non-current
46,433
45
20,000
11
(18,185)
-
-
48,304
682,329
(74,851)
(231,797)
(2,702)
18,185
122,839
21,130
535,133
(*) Related to the GPC acquisition, for more information see note 34 to these Consolidated Financial Statements.
184
Consolidated Financial Statements
For the years ended 2023, 2022 and 2021 - all amounts in thousands of U.S. dollars, unless otherwise stated
22
Deferred tax assets and liabilities
Deferred income taxes are calculated in full on temporary differences under the liability method using the tax rate
of each country.
The evolution of deferred tax assets and liabilities during the year is as follows:
Deferred tax liabilities
At the beginning of the year
Translation differences
Increase due to business combinations (*)
Charged to other comprehensive income
Income statement charge
At December 31, 2023
Fixed assets
Inventories
Intangible assets
and other
Total
575,667
41
4,175
-
38,991
618,874
43,532
113
7,563
-
63,127
114,335
114,542
397
5,498
138
39,627
160,202
733,741
551
17,236
138
141,745
893,411
At the beginning of the year
Translation differences
Charged to other comprehensive income
Income statement (credit) / charge
At December 31, 2022
Deferred tax assets
At the beginning of the year
Translation differences
Increase due to business combinations (*)
Charged to other comprehensive income
Income statement (credit) / charge
At December 31, 2023
At the beginning of the year
Translation differences
Charged to other comprehensive income
Income statement charge / (credit)
At December 31, 2022
Fixed assets
Inventories
Intangible assets
and other
Total
669,830
(64)
-
(94,099)
575,667
27,508
15
-
16,009
43,532
104,346
600
1,719
7,877
114,542
801,684
551
1,719
(70,213)
733,741
Provisions
and
allowances
(25,817)
(6)
(1,374)
Provisions
and
allowances
(25,083)
(345)
Inventories
Tax losses
Other
Total
(180,152)
(24)
(223)
(310,589)
1
(1,875)
-
-
-
(4,314)
(31,511)
(18,620)
(199,019)
(322,431)
(634,894)
(156,984)
(611)
(35,941)
(2,342)
9,881
(185,997)
(673,542)
(640)
(39,413)
(2,342)
(335,484)
(1,051,421)
Inventories
Tax losses
Other
Total
(85,037)
114
(485,763)
747
-
-
-
(389)
(25,817)
(95,229)
(180,152)
174,427
(310,589)
(176,627)
(245)
954
18,934
(156,984)
(772,510)
271
954
97,743
(673,542)
(*) Related to the GPC, Isoplus anticorrosion coating division and Mattr’s pipe coating business unit acquisitions. For more information see note
34.
Deferred tax assets related to tax losses of Tenaris subsidiaries are recognized to the extent it is probable that future
taxable profits will be available, against which such losses can be utilized. The utilization of such tax losses may also
be restricted by the nature of the profit, expiration dates and / or potential limitations on their yearly consumption.
In determining the amount of deferred taxes to be recognized, Tenaris considered existing evidence, both positive
and negative, including the historical taxable profits and the projections of future taxable profits prepared by
management to assess the probability that the deferred tax assets will be realized. Management applies significant
judgment in assessing the likelihood that future taxable profits will be available.
185
Consolidated Financial Statements
For the years ended 2023, 2022 and 2021 - all amounts in thousands of U.S. dollars, unless otherwise stated
Deferred tax assets related to tax losses as of the end of 2023 include $550.3 million recognized in its Luxembourg
subsidiary mainly due to impairment charges over certain undertakings in the past years. Under the Luxembourg
tax law, tax losses generated before 2017 can be carried forward indefinitely and are not subject to any yearly
consumption limitation. Losses incurred as from 2017 may be carried forward for a maximum of 17 years.
Tenaris has concluded as of end 2023 that it is probable that sufficient future taxable profits will be generated by
business activities to be carried out by its Luxembourg subsidiary, against which the above-mentioned tax losses
could be utilized prior to their expiration.
Deferred tax assets related to tax losses also include $77.9 million related to U.S. subsidiaries mainly due to the
recognition of accelerated fiscal depreciations, as well as the amounts related to the acquisition of IPSCO in 2020.
Tenaris has concluded that these deferred tax assets will be recoverable based on the business plans and budgets.
Approximately 99% of the recognized tax losses have an expiration date in more than 5 years or do not expire.
As of December 31, 2023, the net unrecognized deferred tax assets amounted to $3,130.0 million. Approximately
99% of the unrecognized tax losses have an expiration date in more than 5 years or do not expire.
The estimated recovery analysis of deferred tax assets and settlement of deferred tax liabilities, which takes into
consideration management assumptions and estimates, is as follows:
Deferred tax assets to be recovered after 12 months
Deferred tax liabilities to be settled after 12 months
2023
Year ended December 31,
2022
(171,717)
688,124
(655,415)
689,976
Deferred income tax assets and liabilities are offset when (1) there is a legally enforceable right to set-off current
tax assets against current tax liabilities and (2) when the deferred income taxes relate to the same fiscal authority
on either the same taxable entity or different taxable entities where there is an intention to settle the balances on
a net basis. The following amounts, determined after appropriate set-off, are shown in the Consolidated Statement
of Financial Position:
Deferred tax assets
Deferred tax liabilities
Year ended December 31,
2022
2023
(789,615)
631,605
(158,010)
(208,870)
269,069
60,199
The movement in the net deferred income tax (asset) / liability account is as follows:
At the beginning of the year
Translation differences
Increase due to business combinations (*)
Charged to other comprehensive income
Income statement (credit) / charge
At the end of the year
Year ended December 31,
2022
2023
60,199
(89)
(22,177)
(2,204)
(193,739)
(158,010)
29,174
822
-
2,673
27,530
60,199
(*) Related to the GPC, Isoplus anticorrosion coating division and Mattr’s pipe coating business unit acquisitions. For more information see note
34.
186
Consolidated Financial Statements
For the years ended 2023, 2022 and 2021 - all amounts in thousands of U.S. dollars, unless otherwise stated
23
Other liabilities
(i) Other liabilities – Non-current
Post-employment benefits
Other long-term benefits
Miscellaneous
Year ended December 31,
2022
2023
117,506
91,435
62,327
271,268
108,936
71,446
49,760
230,142
At December 31, 2023 the weighted average duration of liabilities related to post-employment benefits was 6 years.
Post-employment benefits
Unfunded
Funded
▪ Unfunded
Values at the beginning of the year
Current service cost
Interest cost
Curtailments and settlements
Remeasurements (*)
Translation differences
Increase due to business combinations (**)
Benefits paid from the plan
Reclassified to current liabilities
Other
At the end of the year
Year ended December 31,
2022
2023
112,532
4,974
117,506
103,822
5,114
108,936
Year ended December 31,
2022
2023
103,822
6,537
11,707
(675)
8,899
(12,687)
4,531
(8,762)
-
(840)
112,532
103,841
6,810
7,610
(64)
(4,228)
(5,657)
-
(5,111)
(461)
1,082
103,822
(*) For 2023 a loss of $0.6 million is attributable to demographic assumptions and a loss of $8.3 million to financial assumptions.
For 2022 a gain of $0.1 million is attributable to demographic assumptions and a gain of $4.1 million to financial assumptions.
(**) Related to the GPC, Isoplus anticorrosion coating division and Mattr’s pipe coating business unit acquisitions. For more information see note
34.
The actuarial assumptions for the most relevant plans were as follows:
Discount rate
Rate of compensation increase
Year ended December 31,
2022
2023
4% - 7%
3% - 7%
2% - 3%
2% - 5%
As of December 31, 2023, an increase / (decrease) of 1% in the discount rate assumption of the main plans would
have generated a (decrease) / increase on the defined benefit obligation of $5.6 million and $5.0 million respectively,
and an increase / (decrease) of 1% in the rate of compensation assumption of the main plans would have generated
an increase / (decrease) impact on the defined benefit obligation of $2.7 million and $2.9 million respectively. The
above sensitivity analyses are based on a change in discount rate and rate of compensation while holding all other
assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be
correlated.
187
Consolidated Financial Statements
For the years ended 2023, 2022 and 2021 - all amounts in thousands of U.S. dollars, unless otherwise stated
▪
Funded
The amounts recognized in the statement of financial position for the current annual period and the previous
annual period are as follows:
Present value of funded obligations
Fair value of plan assets
Asset (*)
Year ended December 31,
2022
2023
123,234
(134,052)
(10,818)
116,617
(126,842)
(10,225)
(*) In 2023 and 2022, $15.8 million and $15.3 million corresponding to plans with surplus balances that were reclassified within other non-
current assets, respectively, consequently the net post-employment benefits funded exposed as liabilities amounted to $5.0 million and $5.1
million respectively.
The movement in the present value of funded obligations is as follows:
At the beginning of the year
Translation differences
Current service cost
Interest cost
Remeasurements (*)
Increase due to business combinations (**)
Benefits paid
Other
At the end of the year
Year ended December 31,
2022
2023
116,617
1,940
-
5,715
2,142
4,708
(8,459)
571
123,234
159,528
(6,635)
154
4,293
(30,349)
-
(10,374)
-
116,617
(*) For 2023 a loss of $0.9 million is attributable to demographic assumptions and a loss of $1.3 million to financial assumptions.
For 2022 a gain of $4.8 million is attributable to demographic assumptions and a gain of $25.6 million to financial assumptions.
(**) Related to Mattr’s pipe coating business unit acquisition. For more information see note 34.
The movement in the fair value of plan assets is as follows:
At the beginning of the year
Translation differences
Return on plan assets
Remeasurements
Increase due to business combinations (*)
Contributions paid to the plan
Benefits paid from the plan
Other
At the end of the year
Year ended December 31,
2022
2023
(160,504)
(126,842)
6,639
(1,897)
(4,319)
(6,121)
(4,225)
20,987
(3,903)
-
-
8,459
477
(134,052)
(435)
10,374
416
(126,842)
(*) Related to Mattr’s pipe coating business unit acquisitions. For more information see note 34.
The major categories of plan assets as a percentage of total plan assets are as follows:
Equity instruments
Debt instruments
Others
Year ended December 31,
2022
2023
29%
18%
67%
33%
4%
49%
188
Consolidated Financial Statements
For the years ended 2023, 2022 and 2021 - all amounts in thousands of U.S. dollars, unless otherwise stated
The actuarial assumptions for the most relevant plans were as follows:
Discount rate
Rate of compensation increase
Year ended December 31,
2022
2023
3% - 5%
5% - 5%
0% - 3%
0% - 3%
The expected return on plan assets is determined by considering the expected returns available on the assets
underlying the current investment policy. Expected return on plan assets is determined based on long-term,
prospective rates of return as of the end of the reporting period.
As of December 31, 2023, an increase / (decrease) of 1% in the discount rate assumption of the main plans would
have generated a (decrease) / increase on the defined benefit obligation of $11.7 million and $9.9 million
respectively, and an increase / (decrease) of 1% in the compensation rate assumption of the main plans would have
generated an increase / (decrease) on the defined benefit obligation of $0.7 million and $0.8 million respectively.
The above sensitivity analyses are based on a change in discount rate and rate of compensation while holding all
other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be
correlated.
The expected employer contributions for the year 2024 are not material.
The methods and types of assumptions used in preparing the sensitivity analyses did not change compared to the
previous period.
(ii) Other liabilities – Current
Payroll and social security payable
Shares to be settled under buyback program
Miscellaneous
24
Non-current allowances and provisions
Liabilities
Values at the beginning of the year
Translation differences
Increase due to business combinations (*)
Additional allowance
Reclassifications
Used and other movements
Values at the end of the year
(*) Related to Mattr’s pipe coating business unit acquisition. For more information see note 34.
Year ended December 31,
2022
2023
301,213
86,240
35,192
422,645
224,630
-
35,984
260,614
Year ended December 31,
2022
2023
98,126
4,260
1,500
1,901
(164)
(4,170)
101,453
83,556
357
-
11,102
2,229
882
98,126
189
Consolidated Financial Statements
For the years ended 2023, 2022 and 2021 - all amounts in thousands of U.S. dollars, unless otherwise stated
25
(i)
Current allowances and provisions
Deducted from assets
Year ended December 31, 2023
Values at the beginning of the year
Translation differences
Increase due to business combinations (*)
(Additional) allowances
Used
At December 31, 2023
Allowance for
doubtful accounts -
Trade receivables
Allowance for other
doubtful accounts -
Other receivables
Allowance for
inventory
obsolescence
(45,495)
(128)
(899)
(3,590)
1,066
(49,046)
(3,479)
(88)
-
(107)
235
(3,439)
(222,666)
(452)
(9,179)
(13,581)
36,768
(209,110)
(*) Related to the GPC, Isoplus anticorrosion coating division and Mattr’s pipe coating business unit acquisitions. For more information see note
34.
Year ended December 31, 2022
Values at the beginning of the year
Translation differences
(Additional) / reversal allowances
Used
At December 31, 2022
(ii)
Liabilities
Allowance for
doubtful accounts -
Trade receivables
Allowance for other
doubtful accounts -
Other receivables
Allowance for
inventory
obsolescence
(47,120)
(12)
223
1,414
(45,495)
(3,206)
68
(346)
5
(3,479)
(245,774)
(405)
(24,901)
48,414
(222,666)
Year ended December 31, 2023
Sales risks
Other claims and
contingencies (*)
Total
Values at the beginning of the year
Translation differences
Increase due to business combinations (**)
Additional provisions
Reclassifications
Used
At December 31, 2023
Year ended December 31, 2022
Values at the beginning of the year
Translation differences
Additional provisions
Reclassifications
Used
At December 31, 2022
3,186
285
-
30,057
-
(13,588)
19,940
7,999
(208)
5,317
6,941
164
(4,194)
16,019
11,185
77
5,317
36,998
164
(17,782)
35,959
Sales risks
Other claims and
contingencies (*)
Total
1,468
(160)
5,315
-
(3,437)
3,186
7,854
(97)
4,189
(2,229)
(1,718)
7,999
9,322
(257)
9,504
(2,229)
(5,155)
11,185
(*) Other claims and contingencies mainly include lawsuits and other legal proceedings, including employee, tax and environmental-related claims.
(**) Related to Mattr’s pipe coating business unit acquisition. For more information see note 34.
190
Consolidated Financial Statements
For the years ended 2023, 2022 and 2021 - all amounts in thousands of U.S. dollars, unless otherwise stated
26
Derivative financial instruments
Net fair values of derivative financial instruments
The net fair values of derivative financial instruments, in accordance with IFRS 13, are:
Derivatives hedging borrowings and investments
Other derivatives
Contracts with positive fair values
Other derivatives
Contracts with negative fair values
Total
Year ended December 31,
2022
2023
-
9,801
9,801
(11,150)
(11,150)
(1,349)
6,480
24,325
30,805
(7,127)
(7,127)
23,678
Foreign exchange and commodities derivative contracts and hedge accounting
Tenaris applies hedge accounting to certain cash flow hedges of highly probable forecast transactions. The net fair
values of exchange rate derivatives and those derivatives that were designated for hedge accounting as of December
31, 2023 and 2022 were as follows:
Purchase currency
Sell currency
Term
Fair Value
Hedge Accounting Reserve
2023
2022
2023
2022
MXN
USD
EUR
USD
USD
USD
USD
USD
USD
RON
BRL
Others
Total
USD
MXN
USD
EUR
BRL
KWD
CAD
GBP
CNY
USD
USD
Commodity Derivatives
Houston Ship Channel Gas
LME Scrap
Iron Ore
Electric Energy
TTF Gas
PSV Gas
Nickel
Total
2024
2024
2024
2024 / 2025
2024
2024
2024
2024
2024
2024
2024
2024
Term
2024
2024
2024
2024
2024
2024
2024
-
(2,125)
5,557
(2,966)
(1,009)
(50)
(836)
(51)
(335)
261
49
(49)
(1,554)
6,571
-
1,866
20,783
(2,490)
(129)
404
(11)
(242)
50
223
13
27,038
-
-
624
7,142
-
(388)
-
-
501
-
49
-
7,928
(67)
-
(2,786)
23,935
-
-
-
-
-
-
-
3
21,085
Fair Value
Hedge Accounting Reserve
2023
2022
2023
2022
(231)
1,376
-
(340)
-
(2,566)
1,966
205
(814)
29
12
(519)
(2,068)
-
-
(3,360)
(231)
1,376
-
(340)
-
(2,566)
1,966
205
(814)
(3,148)
(1,274)
(519)
(2,207)
-
-
(7,963)
Following is a summary of the hedge reserve evolution:
Foreign Exchange & Commodities
Total Cash flow Hedge
1,259
1,259
11,863
11,863
13,122
13,122
(4,989)
(4,989)
8,133
8,133
Equity Reserve
Dec-2021
Movements
2022
Equity Reserve
Dec-2022
Movements
2023
Equity Reserve
Dec-2023
Tenaris estimates that the majority of the cash flow hedge reserve corresponding to derivatives instruments at
December 31, 2023 will be recycled to the Consolidated Income Statement during 2024. For information on hedge
accounting reserve, see section III.D to these Consolidated Financial Statements.
191
Consolidated Financial Statements
For the years ended 2023, 2022 and 2021 - all amounts in thousands of U.S. dollars, unless otherwise stated
27
(i)
Contingencies, commitments and restrictions on the distribution of profits
Contingencies
Tenaris is from time to time subject to various claims, lawsuits and other legal proceedings, including customer,
employee, tax and environmental-related claims, in which third parties are seeking payment for alleged damages,
reimbursement for losses, or indemnity. Management, with the assistance of legal counsel, periodically reviews the
status of each significant matter and assesses potential financial exposure.
Some of these claims, lawsuits and other legal proceedings involve highly complex issues, and often these issues
are subject to substantial uncertainties and, therefore, the probability of loss and an estimation of damages are
difficult to ascertain. Accordingly, with respect to a large portion of such claims, lawsuits and other legal
proceedings, the Company is unable to make a reliable estimate of the expected financial effect that will result from
ultimate resolution of the proceeding. In those cases, the Company has not accrued a provision for the potential
outcome of these cases.
If a potential loss from a claim, lawsuit or other proceeding is considered probable and the amount can be
reasonably estimated, a provision is recorded. Accruals for loss contingencies reflect a reasonable estimate of the
losses to be incurred based on information available to management as of the date of preparation of the financial
statements and take into consideration litigation and settlement strategies. In a limited number of ongoing cases,
the Company was able to make a reliable estimate of the expected loss or range of probable loss and, depending
on the likelihood of occurrence, in some of such cases has accrued a provision for such loss but believes that
publication of this information on a case-by-case basis would seriously prejudice the Tenaris’s position in the
ongoing legal proceedings or in any related settlement discussions. Accordingly, in these cases, the Company has
disclosed information with respect to the nature of the contingency but has not disclosed its estimate of the range
of potential loss.
The Company believes that the aggregate provisions recorded for potential losses in these Consolidated Financial
Statements are adequate based upon currently available information. However, if management’s estimates prove
incorrect, current reserves could be inadequate and the Company could incur a charge to earnings which could
have a material adverse effect on its results of operations, financial condition, net worth and cash flows.
Below is a summary description of Tenaris’s material legal proceedings which are outstanding as of the date of
these Consolidated Financial Statements. In addition, the Company is subject to other legal proceedings, none of
which is believed to be material.
▪ CSN claims relating to the January 2012 acquisition of Usiminas
In 2013, the Company was notified of a lawsuit filed in Brazil by Companhia Siderúrgica Nacional (“CSN”), and
various entities affiliated with CSN against the Company’s Brazilian subsidiary Confab and three subsidiaries of
Ternium, all of which compose the T/T Group under the Usiminas shareholders agreement. The entities named in
the CSN lawsuit had acquired a participation in Usiminas in January 2012. The CSN lawsuit alleges that, under
applicable Brazilian laws and rules, the acquirers were required to launch a tag-along tender offer to all non-
controlling holders of Usiminas ordinary shares for a price per share equal to 80% of the price per share paid in
such acquisition, or BRL 28.8, and seeks an order to compel the acquirers to launch an offer at that price plus
interest. If so ordered, the offer would need to be made to 182,609,851 ordinary shares of Usiminas not belonging
to Usiminas’ control group. Confab’s share in the offer would be 17.9%.
On September 23, 2013, the first instance court dismissed the CSN lawsuit, and on February 8, 2017, the court of
appeals maintained the understanding of the first instance court. On August 18, 2017, CSN filed an appeal to the
Superior Court of Justice (“SCJ”) seeking the review and reversal of the decision issued by the Court of Appeals.
On September 10, 2019, the SCJ declared CSN’s appeal admissible. On March 7, 2023, the SCJ, by majority vote,
rejected CSN’s appeal. CSN made several submissions in connection with the SCJ decision, including a motion for
clarification that challenged the merits of the SCJ decision. Decisions at the SCJ are adopted by majority vote and,
at the date of these financial statements, voting at the SCJ with respect to the motion for clarification is ongoing.
At an October 17, 2023 session, two justices voted in favor of remanding the case to the first instance for it to be
retried following production and assessment of the new evidence, and two justices voted, without requiring any
further evidence, in favor of granting CSN’s motion for clarification and reversing the March 7, 2023 decision that
rejected CSN’s appeal; because the fifth member of SCJ excused himself from voting, a justice from another panel
at the SCJ will be summoned to produce the tie-breaking vote. There are no specified deadlines for voting to be
resumed or the SCJ decision to be issued. In any event, either party may appeal against a SCJ decision.
192
Consolidated Financial Statements
For the years ended 2023, 2022 and 2021 - all amounts in thousands of U.S. dollars, unless otherwise stated
According to the views of the two justices that voted in favor of CSN’s motion, Confab and the other members of
the T/T Group should be ordered to pay to CSN an indemnification amount equal to the difference between the
price paid by the T/T Group in its acquisition and the market value of the Usiminas shares at signing, plus monetary
adjustment and interest (at a rate of 1% per month) through the date of payment, plus legal costs equal to 10%
of the compensation payable to CSN, with CSN retaining ownership of the Usiminas ordinary shares it currently
owns. If that unprecedented view were to prevail, and depending on how the indemnification is calculated by other
courts, as of the date of these financial statements the potential aggregate indemnification payable by Confab
could reach up to BRL900.4 million (approximately $186.0 million at the BRL/$ rate as of such date).
The Company continues to believe that all of CSN’s claims and allegations are groundless and without merit, as
confirmed by several opinions of Brazilian legal counsel, two decisions issued by the Brazilian securities regulator in
February 2012 and December 2016, the first and second instance court decisions and the March 7, 2023 SCJ
decision referred to above. Notwithstanding the foregoing, in light of the votes already issued by two members of
the SCJ on CSN’s motion for clarification, the Company cannot predict the ultimate resolution on the matter.
▪ Veracel celulose accident litigation
On September 21, 2007, an accident occurred in the premises of Veracel Celulose S.A. (“Veracel”) in connection
with a rupture in one of the tanks used in an evaporation system manufactured by Confab. The Veracel accident
allegedly resulted in material damages to Veracel. Itaú Seguros S.A. (“Itaú”), Veracel’s insurer at the time of the
Veracel accident and then replaced by Chubb Seguros Brasil S/A (“Chubb”), initiated a lawsuit against Confab
seeking reimbursement of damages paid to Veracel in connection with the Veracel accident. Veracel initiated a
second lawsuit against Confab seeking reimbursement of the amount paid as insurance deductible with respect to
the Veracel accident and other amounts not covered by insurance. Itaú and Veracel claimed that the Veracel accident
was caused by failures and defects attributable to the evaporation system manufactured by Confab. Confab believes
that the Veracel accident was caused by the improper handling by Veracel’s personnel of the equipment supplied
by Confab in violation of Confab’s instructions. The two lawsuits were consolidated and are considered by the 6th
Civil Court of São Caetano do Sul. However, each lawsuit will be adjudicated separately.
On September 28, 2018, Confab and Chubb entered into a settlement agreement pursuant to which on October
9, 2018, Confab paid an amount of approximately $3.5 million to Chubb, without assuming any liability for the
accident or the claim.
On October 10, 2018, Confab was notified that the court had issued rulings for both lawsuits. Both decisions were
unfavorable to Confab:
- With respect to Chubb’s claim, the court subsequently homologated the above-mentioned settlement and,
accordingly, the claim was finalized.
- With respect to Veracel’s claim, Confab was ordered to pay the insurance deductible and other concepts
not covered by insurance, currently estimated to amount to BRL100.6 million (approximately $20.8 million)
including interest, fees and expenses. Both parties filed motions for clarification against the court’s decision,
which were partially granted. Although the contract between Confab and Veracel expressly provided that
Confab would not be liable for damages arising from lost profits, the court award would appear to include
BRL86.4 million (approximately $17.8 million) of damages arising therefrom. Confab has additional defense
arguments in respect of a claim for lost profits. On December 18, 2018, Confab filed an appeal against the
first instance court decision, and on April 30, 2019, Veracel filed its response to the appeal. In June 2022,
the court resolved that it lacked jurisdiction to decide on the appeal, which was re-allocated to another
court. The parties are currently waiting for the trial of the appeal to be scheduled. At this stage the
Company cannot predict the outcome of the claim or the amount or range of loss in case of an unfavorable
outcome.
193
Consolidated Financial Statements
For the years ended 2023, 2022 and 2021 - all amounts in thousands of U.S. dollars, unless otherwise stated
▪ Petrobras-related proceedings and claims 6
Upon learning that Brazilian, Italian and Swiss authorities were investigating whether certain payments were made
prior to 2014 from accounts of entities presumably associated with affiliates of the Company to accounts allegedly
linked to individuals related to Petróleo Brasileiro S.A. (“Petrobras”) and whether any such payments were intended
to benefit the Company’s Brazilian subsidiary Confab, the Audit Committee of the Company's Board of Directors
engaged external counsel in connection with the Company’s review of these matters. In addition, the Company
voluntarily notified the U.S. Securities and Exchange Commission (“SEC”) and the U.S. Department of Justice
(“DOJ”) in October 2016. The Company conducted, with the assistance of external counsel, an internal investigation
and found no evidence corroborating any involvement by the Company or its directors, officers or employees in
respect of improper payments. An internal investigation commissioned by Petrobras also found no evidence that
Confab obtained any unfair commercial benefit or advantage from Petrobras in return for payments, including
improperly obtained contracts. On June 2, 2022, the Company resolved the investigation by the SEC, and the DOJ
informed that it had closed its parallel inquiry without taking action. Under the settlement with the SEC, the
Company neither admits nor denies the SEC’s findings and on June 24, 2022, paid $53.1 million in disgorgement
and prejudgment interest and $25 million for a civil penalty to conclude the matter.
In July 2019, the Company learned that the public prosecutors’ office of Milan, Italy, had completed a preliminary
investigation into the same alleged payments and had included in the investigation, among other persons, the
Company’s Chairman and Chief Executive Officer, two other board members, Gianfelice Rocca and Roberto Bonatti,
and the Company’s controlling shareholder, San Faustin. The Company is not a party to the proceedings. On March
22, 2022, upon completion of the evidentiary phase of the trial, the acting prosecutor requested the first-instance
court in Milan in charge of the case to impose sanctions on our Chairman and Chief Executive Officer, on the other
two board members, and on San Faustin. The Company’s outside counsel in Italy advised the Company that neither
the case file nor the prosecutor’s request contain or identify any evidence of involvement in, or knowledge of, the
alleged wrongdoing by any of the three directors. On May 26, 2022, the first-instance court dismissed the case
brought by the public prosecutor against the defendants for lack of jurisdiction and stated that the criminal
proceeding should not have been initiated. On October 7, 2022, the public prosecutor filed an appeal against the
first-instance court’s decision. On February 22, 2024, the court of appeals referred the case to the court of cassation,
which will be in charge of determining whether or not the Italian courts have jurisdiction over the matter.
In June 2020, the Brazilian public prosecutors’ office requested the indictment of several individuals, including three
executives or former executives of Confab and a former agent of Confab, charging them with the alleged crimes
of corruption in relation to contracts executed between 2007 and 2010, and money laundering in relation to
payments between 2009 and 2013. These criminal proceedings are underway. Neither the Company nor Confab is
a party to these criminal proceedings.
In addition, Petrobras and the Brazilian public prosecutors filed civil claims for damages against, among others,
Confab and the Confab executives named in the criminal proceedings referred to above. Confab became aware of
these civil claims in September 2022. As of December 31, 2023, the aggregate amount of these claims was
estimated at BRL322.2 million (or approximately $66.6 million). The plaintiffs also seek that Confab be prohibited
from contracting with, or receiving benefits or exemptions from, the Brazilian state for an unspecified term. Confab
believes these claims do not address either the defense arguments or the evidence available to the plaintiffs in Brazil
and presented in other jurisdictions and is vigorously contesting them. At this stage, the Company cannot predict
the outcome of these civil proceedings.
▪ Putative class actions
Following the Company’s November 27, 2018, announcement that its Chairman and CEO Paolo Rocca had been
included in an Argentine court investigation known as the Notebooks Case (a decision subsequently reversed by a
higher court), two putative class action complaints were filed in the U.S. District Court for the Eastern District of
New York. On April 29, 2019, the court consolidated the complaints into a single case, captioned “In re Tenaris
S.A. Securities Litigation”, and appointed lead plaintiffs and lead counsel.
6 This note was updated subsequently to the approval of these Consolidated Financial Statements by the Company’s Board of Directors on
February 21, 2024.
194
Consolidated Financial Statements
For the years ended 2023, 2022 and 2021 - all amounts in thousands of U.S. dollars, unless otherwise stated
On July 19, 2019, the lead plaintiffs filed an amended complaint purportedly on behalf of purchasers of Tenaris
securities during the putative class period of May 1, 2014, through December 5, 2018. The individual defendants
named in the complaint are Tenaris’s Chairman and CEO and Tenaris’s former CFO. The complaint alleges that
during the class period, the Company and the individual defendants inflated the Tenaris share price by failing to
disclose that the nationalization proceeds received by Ternium (in which the Company held an 11.46% stake) when
Sidor was expropriated by Venezuela were received or expedited as a result of allegedly improper payments made
to Argentine officials. The complaint does not specify the damages that plaintiff is seeking.
On October 9, 2020, the court granted in part and denied in part the defendants’ motions to dismiss. The court
partially granted and partially denied the motion to dismiss the claims against the Company and its Chairman and
CEO. In addition, the court granted the motions to dismiss as to all claims against San Faustin, Techint, and Tenaris’s
former CFO.
On November 11, 2022, the parties filed a joint notice of settlement announcing a settlement in principle of all
claims in the action, subject to finalizing the settlement agreements and court approval. The parties’ agreement in
principle provides that, in exchange for dismissal of the action and customary releases from class members and with
no admission of liability by Tenaris or Mr. Rocca, Tenaris will pay to the class $9.5 million (inclusive of legal fees to
lead plaintiff’s counsel).
On April 10, 2023, the court granted preliminary approval to the class settlement. The final settlement approval
hearing was set for October 19, 2023, and on that date the court ordered that, prior to granting final settlement
approval, the lead plaintiffs submit on or before March 29, 2024, an update letter advising the court of the status
of the claims processing.
▪ Administrative proceeding concerning Brazilian tax credits
Confab is a party to an administrative proceeding concerning the recognition and transfer of tax credits for an
amount allegedly exceeding the amount that Confab would have been entitled to recognize and / or transfer. The
proceeding resulted in the imposition of a fine against Confab representing approximately 75% of the allegedly
undue credits, which was appealed by Confab. On January 21, 2019, Confab was notified of an administrative
decision denying Confab’s appeal, thereby upholding the tax determination and the fine against Confab. On
January 28, 2019, Confab challenged such administrative decision. Special appeals were filed by Confab in July
2023 and by the Brazilian General Tax Attorney (“PGFN”) in September 2023. The parties are currently awaiting a
resolution. In case of an unfavorable resolution, Confab may appeal before the courts. The estimated amount of
this claim is BRL60.7 million (approximately $12.5 million). At this stage, the Company cannot predict the outcome
of this claim.
▪ U.S. patent infringement litigation
Tenaris Coiled Tubes, LLC (“TCT”), a U.S. subsidiary of the Company, was sued in 2017 by its competitor Global
Tubing, alleging defamatory conduct by TCT and seeking a declaration that certain Global Tubing products do not
infringe patents held by TCT. TCT counterclaimed that certain Global Tubing products did infringe patents held by
TCT, and Global Tubing has since sought to invalidate such patents. On December 13, 2019, Global Tubing filed
an amended complaint (including the Company as defendant), alleging, among other things, that TCT and the
Company had misled the patent office. On March 20, 2023, the judge granted summary judgment in favor of
Global Tubing, concluding that the patents at issue are unenforceable due to inequitable conduct during the patent
prosecution process. TCT appealed this judgment, and Global Tubing appealed a previous ruling of the judge. Global
Tubing also filed a brief seeking to recover attorneys’ fees, without specifying the amount of those fees. Although
it is not possible to predict the final outcome of this matter, the Company believes that any potential losses arising
from this case will not be material.
195
Consolidated Financial Statements
For the years ended 2023, 2022 and 2021 - all amounts in thousands of U.S. dollars, unless otherwise stated
▪ U.S. Antidumping Duty Investigations
On October 27, 2021, the U.S. Department of Commerce (“DOC”) initiated antidumping duty investigations of oil
country tubular goods (“OCTG”) from Argentina, Mexico, and Russia. After the DOC issued affirmative preliminary
and final antidumping determinations with respect to imports from Argentina, Mexico and Russia on October 27,
2022, the International Trade Commission (“ITC”) determined that the imports under investigation caused injury to
the U.S. OCTG industry. Tenaris and other parties have appealed the agency determinations from the investigation
to the Court of International Trade. In addition, in response to a request from the Government of Argentina, the
World Trade Organization (“WTO”) established a panel of experts to consider whether the DOC’s antidumping
order applicable to Argentina is consistent with the international obligations of the United States. As a result of the
investigation, and unless overturned on appeal, Tenaris is required to pay antidumping duty deposits (at a rate of
78.30% for imports from Argentina and 44.93% for imports from Mexico) until such time the imports are reviewed
by the DOC to determine whether final duties are necessary for the specific period under review. Tenaris has been
paying such deposits since May 11, 2022, reflecting the amount of such deposits in its costs. The deposit rates may
be reset periodically based on the results of the review process. It is possible that, through the periodic review
process, the deposits may be either returned to Tenaris in whole or in part, or may be increased.
▪ Potential dispute with agent in the Middle East 7
Consistent with local practice in certain Middle East countries, Tenaris Global Services S.A. (“TGSU”), a Uruguayan
subsidiary of the Company, sells materials to a local agent, and the agent then resells the materials to customers in
the region. Tenaris is not a party to the contracts between the agent and each customer. In one such contract
entered into in mid-2021, with pending obligations of approximately $520 million and deliveries until 2025, the
agent agreed to supply Tenaris-produced casing and tubing of different sizes to the customer. Subsequent events
led to onerous increases in prices and delays to supply the materials and led to lengthy discussions between the
parties. The customer paid a significant portion of such increased costs and, as a result, the dispute was settled.
(ii) Commitments and guarantees
Set forth is a description of the Tenaris’s main outstanding commitments:
▪ Certain subsidiaries of the Company entered into a contract with Praxair S.A. for the service of oxygen and
nitrogen supply. As of December 31, 2023, the aggregate amount to take or pay the committed volumes for an
original 14-year term totaled approximately $32.7 million.
▪ A subsidiary of the Company entered into a 25-year contract (effective as of December 1, 2016, through
December 1, 2041) with Techgen for the supply of 197 MW (which represents 22% of Techgen’s capacity).
Monthly payments are determined on the basis of capacity charges, operation costs, back-up power charges,
and transmission charges. As of the seventh contract year (as long as Techgen’s existing or replacing bank facility
has been repaid in full), the Company’s subsidiary has the right to suspend or early terminate the contract if the
rate payable under the agreement is higher than the rate charged by the Comisión Federal de Electricidad
(“CFE”) or its successors. The Company’s subsidiary may instruct Techgen to sell to any affiliate, to CFE, or to
any other third party all or any part of unused contracted energy under the agreement and the Company’s
subsidiary will benefit from the proceeds of such sale.
▪ A U.S. subsidiary of the Company is a party to a contract with Nucor Steel Memphis Inc. under which it is
committed to purchase on a monthly basis a specified minimum volume of steel bars, at prices subject to
quarterly adjustments. The contract became effective upon delivery of the first purchase order, which occurred
in April 2021, with an original duration of 3 years. In September 2023, the parties agreed to extend its term
until December 31, 2024. As of December 31, 2023, the estimated aggregate contract amount calculated at
current prices, was approximately $73.7 million. The contract gives the subsidiary of the Company the right to
temporarily reduce the quantities to be purchased thereunder to 75% of the agreed-upon minimum volume in
cases of material adverse changes in prevailing economic or market conditions.
7 This note was updated subsequently to the approval of these Consolidated Financial Statements by the Company’s Board of Directors on
February 21, 2024.
196
Consolidated Financial Statements
For the years ended 2023, 2022 and 2021 - all amounts in thousands of U.S. dollars, unless otherwise stated
▪
In connection with the closing of the acquisition of IPSCO, a U.S. subsidiary of the Company entered into a 6-
year master distribution agreement (the “MDA”) with PAO TMK (“TMK”) whereby, since January 2, 2020,
Tenaris became the exclusive distributor of TMK’s OCTG and line pipe products in United States and Canada. At
the end of the MDA’s 6-year term, TMK would have the option to extend the duration of its term for an
additional 12-month period. Under the MDA, the Company is required to purchase specified minimum volumes
of TMK-manufactured OCTG and line pipe products, based on the aggregate market demand for the relevant
product category in the United States in the relevant year. In February 2022, however, the Company and TMK
agreed that there would be no minimum yearly purchase requirement for the OCTG product category for the
year ended December 31, 2022, and there would be no minimum yearly purchase requirement for TMK line
pipe products under the MDA neither for the contract year ended December 31, 2022, nor for any subsequent
contract year until expiration of the MDA’s term. In addition, no purchases of TMK products were made during
2023. The parties are currently discussing the termination of the MDA.
▪ A Brazilian subsidiary of the Company entered into a contract with Usiminas and Gerdau from which it
committed to purchase steel coils for a remaining amount of approximately $109.6 million to use for
manufacturing welded pipes for the Raia fields project in Brazil.
▪ A subsidiary of the Company entered into a contract with the supplier JFE Steel Corporation for the purchase of
tubular material, including 13 Chrome alloy products following the closure of NKKTubes. Such contract foresees
a penalty for a maximum amount of $30.9 million in case of early termination.
In addition, Tenaris (i) applied for stand-by letters of credit as well as corporate guarantees covering certain
obligations of Techgen as described in note 14 (c) and (ii) issued performance guarantees mainly related to long-
term commercial contracts with several customers and parent companies for approximately $3.6 billion as of
December 31, 2023.
(iii) Restrictions on the distribution of profits and payment of dividends
In accordance with Luxembourg Law, the Company is required to transfer a minimum of 5% of its net profit for
each financial year to a legal reserve until such reserve equals 10% of the issued share capital.
As of December 31, 2023, this reserve is fully allocated and additional allocations to the reserve are not required
under Luxembourg law. Dividends may not be paid out of the legal reserve.
The Company may pay dividends to the extent, among other conditions, that it has distributable retained earnings
calculated in accordance with Luxembourg law and regulations.
28
Cancellation of title deed in Saudi Steel Pipe Company
In early 2021, the Company learned through the Saudi Ministry of Justice’s online portal that the electronic title
deeds to certain land plots of its Saudi Arabian subsidiary SSPC had become inactive due to cancellation by court
order.
The affected land plots, with a total surface of 811,284 square meters, are located in Dammam, Saudi Arabia, and
were purchased from a private entity on February 2010, pursuant to a written purchase agreement duly executed
by SSPC in full compliance with the laws of the Kingdom of Saudi Arabia. The purchase of the land occurred before
Tenaris’s acquisition of a 47.79% interest in SSPC in 2019. The affected plots are not part of the production facility
of SSPC, have been partially used as a warehouse, and have a carrying value on Tenaris’s financial statements of
$56.2 million.
As of the date hereof, neither the cancellation nor the court order have been notified to SSPC or otherwise been
made public by the authorities, and the legal basis for the court order is unknown. On May 4, 2021, SSPC filed a
petition with an ad-hoc created special committee at the Saudi Ministry of Justice, seeking to have its title deeds
reinstated. At this time, it is not possible to predict the outcome of this matter.
197
Consolidated Financial Statements
For the years ended 2023, 2022 and 2021 - all amounts in thousands of U.S. dollars, unless otherwise stated
29
Foreign exchange control measures in Argentina
Between September 2019 and December 13, 2023, the Argentine government imposed significant restrictions on
foreign exchange transactions. Although after a new administration took office in Argentina in December 2023
certain restrictions were eased and other changes to such regulations are expected, at the date of these
Consolidated Financial Statements the application of existing foreign exchange regulations remains uncertain, and
the scope and timing of upcoming changes remain unknown. The main currently applicable measures are described
below:
▪
Foreign currency proceeds derived from exports of goods must be sold into the Argentine foreign exchange
market (“MULC”) and converted into Argentine pesos within 60 days (if made to related parties) or 180
days (if made to unrelated parties) from shipment date, or, if collected earlier, within five days of collection.
Foreign currency proceeds from exports of services must be sold into the MULC and converted into
Argentine pesos within five business days of collection. As from December 13, 2023, up to 20% of export
proceeds can be sold for Argentine pesos through securities transactions resulting in a higher implicit
exchange rate, as described further below. This percentage has changed and is expected to change over
time.
▪ Access to the MULC to pay for imports of services rendered by related and non-related parties (including
royalties) on or before December 12, 2023, is subject to Argentine Central Bank approval. Currently, these
approvals are rarely, if ever, granted. Access to the MULC to pay for imports of services that were rendered
or accrued as from December 13, 2023, does not require government approval, but payment is deferred
30 calendar days as from the date of supply or accrual of the service (if the service was rendered by a non-
related party) or 180 calendar days (if rendered by a related party).
▪ Access to the MULC to pay for imports of goods is subject to several restrictions. For example, advance
payments or at sight cannot be made. In addition:
- Access to the MULC to pay for imports of goods that obtained customs clearance on or before
December 12, 2023 requires the prior Argentine Central Bank approval. The Argentine Central Bank is
currently issuing newly created Bonds (“BOPREALs”) with a maturity of 4 years (i.e., maturing in 2027)
that can only be purchased in Argentine Pesos in primary offerings by debtors of any such import debts;
such bonds can then be sold for a price payable in foreign currency that can be subsequently used to
pay suppliers without subjecting the importer to any restriction to enter into any other foreign
exchange transaction in the MULC. A secondary market for the BOPREALs is still in formation. In
addition, from April 1, 2024 any such importer who purchased BOPREALs in primary offerings may
enter into the securities transactions described below to obtain foreign currency (for an amount that
does not exceed the difference in USD between the nominal value of the bonds and their market prices)
and use such foreign currency to pay the above-mentioned import debts, without subjecting the
importer to any restriction to enter into any other foreign exchange transaction in the MULC.
- Access to the MULC to pay for imports that have obtained customs clearance as from December 13,
2023, does not require government approval but, it requires that the price is paid in four equal
instalments payable on the 30th, 60th, 90th and 120th day counted from the customs clearance of the
good imported.
▪ Access to the MULC to make dividend payments requires prior Argentine Central Bank approval. When
required, Argentine Central Bank approvals are rarely, if ever, granted.
The above-described measures substantially limit the ability of Argentine companies to obtain foreign currency and
make certain payments and distributions out of Argentina through the MULC at the official exchange rate.
Access to foreign currency and transfers out of Argentina can be achieved, however, through securities transactions
involving bonds or shares with multiple listings, resulting in a different implicit exchange rate, generally higher than
the official exchange rate. Such transactions are subject to certain restrictions and limits, which change from time
to time, and often result in a financial loss being generated at the time of making any such transaction. For example,
in the past, the Argentine Securities Commission imposed several additional restrictions on such securities
transactions, including a requirement to give prior notice to the Argentine government of any proposed transfer of
securities outside of Argentina and a limitation on the amount of any such transfers. The new Argentine Securities
Commission’s authorities has loosened certain of such limitations, although it is not clear if it will further eliminate
or loosen remaining restrictions.
198
Consolidated Financial Statements
For the years ended 2023, 2022 and 2021 - all amounts in thousands of U.S. dollars, unless otherwise stated
During May 2023, two Argentine subsidiaries of the Company, approved the distribution of dividends in kind to
their foreign shareholders, which were paid with U.S. dollar-denominated Argentine bonds that, in the Argentine
market had a valuation of approximately $356 million. Considering that, as a result of the foreign exchange
restrictions in force, the value of such bonds in the international market as of the distribution date, was
approximately $174.1 million, the Company recorded a negative equity reserve (FVOCI). Subsequently, the valuation
of such bonds in the international market increased. With the disposal of a portion of these instruments, the
Company partially reclassified such reserve to financial results. The FVOCI as of December 31, 2023, amounted to
approximately $13.1 million.
The exchange rate of the Argentine peso against the U.S. dollar devaluated by more than 100% upon the change
of government. Tenaris’s financial position in Argentine pesos as of December 31, 2023, amounted to a net short
exposure of approximately $135 million. In the event of an additional devaluation, our Argentine subsidiaries, which
hold U.S. dollar-denominated Argentine bonds for an aggregated value of $208.6 million, may be adversely
affected, and will also suffer a loss on deferred tax charge as a result of a deterioration on the tax value of their
fixed assets. At this time, the Company is unable to estimate all impacts of a new devaluation of the Argentine peso
against the U.S. dollar.
As of December 31, 2023, the total equity of Argentine subsidiaries represented approximately 9% of Tenaris’s
total equity and the sales made by Argentine subsidiaries during the year ended December 31, 2023, amounted
approximately to 22% of Tenaris’s total sales. Assets and liabilities denominated in Argentine peso as of December
31, 2023, are valued at the prevailing official exchange rate.
This context of volatility and uncertainty remains in place as of the issue date of these Consolidated Financial
Statements. Management continues to monitor closely the evolution of the main variables affecting its business,
identifying the potential impact thereof on its financial and economic situation and determining the appropriate
course of action in each case. These Consolidated Financial Statements should be read taking into account these
circumstances.
30
Cash flow disclosures
(i)
(ii)
(iii)
Changes in working capital (*)
Inventories
Receivables and prepayments and current tax assets
Trade receivables
Other liabilities
Customer advances
Trade payables
Income tax accruals less payments
Tax accrued
Taxes paid
Interest accruals less payments, net
Interest accrued, net
Interest received
Interest paid
Year ended December 31,
2022
2021
2023
186,903
64,000
153,920
28,275
(101,646)
(149,024)
182,428
674,956
(818,347)
(143,391)
(106,612)
147,473
(94,341)
(53,480)
(1,329,865)
(155,449)
(1,208,278)
57,389
151,066
353,892
(2,131,245)
617,236
(359,585)
257,651
(34,080)
68,335
(32,775)
1,480
(1,085,024)
(79,912)
(356,069)
4,892
44,661
399,988
(1,071,464)
189,448
(153,846)
35,602
(14,371)
24,567
(21,559)
(11,363)
(*) Changes in working capital do not include non-cash movements due to the variations in the exchange rates used by subsidiaries with functional
currencies different from the U.S. dollar.
199
Consolidated Financial Statements
For the years ended 2023, 2022 and 2021 - all amounts in thousands of U.S. dollars, unless otherwise stated
31
Related party transactions
As of December 31, 2023:
▪
▪
San Faustin owned 713,605,187 shares in the Company, representing 60.45% of the Company’s capital
and 61.10% of the voting rights.
San Faustin owned all of its shares in the Company through its wholly-owned subsidiary Techint, a
Luxembourg société à responsabilité limitée, who is the holder of record of the above-mentioned Tenaris
shares.
▪ Rocca & Partners Stichting Administratiekantoor Aandelen San Faustin, a private foundation located in the
Netherlands (Stichting) (“RP STAK”) held voting shares in San Faustin sufficient in number to control San
Faustin.
▪ No person or group of persons controls RP STAK.
Based on the information most recently available to the Company, Tenaris’s directors and senior management as a
group owned 0.07% of the Company’s issued shares.
Transactions and balances disclosed as with “non-consolidated parties” are those with companies over which
Tenaris exerts significant influence in accordance with IFRS, but does not have control. Transactions and balances
disclosed as with “joint ventures” are those with companies over which Tenaris exerts joint control in accordance
with IFRS, but does not have control. All other transactions and balances with related parties which are not non-
consolidated parties and which are not consolidated are disclosed as “Other”. The following transactions were
carried out with related parties:
(i)
Transactions
(a) Sales of goods and services
Sales of goods to associated companies
Sales of goods to other related parties
Sales of services to associated companies
Sales of services to joint ventures
Sales of services to other related parties
(b) Purchases of goods and services
Purchases of goods to associated companies
Purchases of goods to joint ventures
Purchases of goods to other related parties
Purchases of services to associated companies
Purchases of services to other related parties
(c) Financial Results
Income from joint ventures
(d) Dividends
Dividends received from associated companies
Dividends distributed to Techint Holdings S.àr.l.
2023
Year ended December 31,
2022
2021
56,152
121,679
1,564
135
109,553
289,083
324,556
72,741
61,366
13,349
76,751
548,763
5,645
5,645
69,216
385,347
100,019
151,884
1,472
131
109,123
362,629
555,257
101,620
51,040
13,759
36,767
758,443
3,804
3,804
64,189
321,122
71,879
76,467
1,164
130
49,268
198,908
225,319
69,610
32,453
9,763
13,806
350,951
2,867
2,867
78,926
192,673
200
Consolidated Financial Statements
For the years ended 2023, 2022 and 2021 - all amounts in thousands of U.S. dollars, unless otherwise stated
(ii)
Period-end balances
(a) Arising from sales / purchases of goods / services
Receivables from associated companies
Receivables from joint ventures
Receivables from other related parties
Payables to associated companies
Payables to joint ventures
Payables to other related parties
(b) Financial debt
Finance lease liabilities from associated companies
Finance lease liabilities from other related parties
At December 31,
2023
2022
7,589
63,374
62,986
(21,012)
(28,361)
(11,488)
73,088
(1,459)
(375)
(1,834)
9,012
60,123
78,370
(113,738)
(28,490)
(13,283)
(8,006)
(1,650)
(483)
(2,133)
In addition to the tables above, the Company issued various guarantees in favor of Techgen; for further details,
please see note 14 (c and d) and note 27 (ii) to these Consolidated Financial Statements. No other material
guarantees were issued in favor of other related parties.
Directors and senior management compensation
During the years ended December 31, 2023, 2022 and 2021, the cash compensation of Directors and Senior
managers amounted to $47.5 million, $35.2 million and $37.7 million respectively. These amounts include cash
benefits paid to certain senior managers in connection with the pre-existing retirement plans. In addition, Directors
and Senior managers received 388, 437 and 382 thousand units for a total amount of $5.6 million, $5.1 million
and $3.9 million respectively in connection with the Employee retention and long-term incentive program
mentioned in note II.P.3 “Employee benefits – Other long-term benefits” to these Consolidated Financial
Statements.
32
Principal accountant fees
Total fees accrued for professional services rendered by PwC Network firms to Tenaris S.A. and its subsidiaries are
detailed as follows:
Audit fees
Audit-related fees
Tax fees
All other fees
Total
Year ended December 31,
2022
2023
2021
4,386
273
148
14
4,821
3,966
255
-
11
4,232
3,804
220
-
5
4,029
In addition, PwC Network firms rendered $242 thousand for tax services to the recently acquired Mattr’s pipe
coating business unit.
201
Consolidated Financial Statements
For the years ended 2023, 2022 and 2021 - all amounts in thousands of U.S. dollars, unless otherwise stated
33
Principal subsidiaries
The following is a list of Tenaris’s principal subsidiaries and its direct and indirect percentage of ownership of each
controlled company at December 31, 2023.
Company
Country of
Incorporation
Main activity
ALGOMA TUBES INC.
BREDERO SHAW INTERNATIONAL B.V. and
subsidiaries
CONFAB INDUSTRIAL S.A. and subsidiaries
DALMINE S.p.A. and subsidiaries
EXIROS B.V. and subsidiaries (a)
HYDRIL COMPANY and subsidiaries
MAVERICK TUBE CORPORATION and subsidiaries
P.T. SEAMLESS PIPE INDONESIA JAYA
S.C. SILCOTUB S.A.
SAUDI STEEL PIPE CO. and subsidiaries (b)
SIAT SOCIEDAD ANONIMA
SIDERCA SOCIEDAD ANONIMA INDUSTRIAL Y
COMERCIAL and subsidiaries (c)
TALTA - TRADING E MARKETING SOCIEDADE
UNIPESSOAL LDA.
TENARIS BAY CITY, INC.
TENARIS CONNECTIONS BV
TENARIS FINANCIAL SERVICES S.A.
TENARIS GLOBAL SERVICES (CANADA) INC.
TENARIS GLOBAL SERVICES (U.S.A.)
CORPORATION
TENARIS GLOBAL SERVICES (UK) LTD
Canada
Netherlands
Brazil
Italy
Netherlands
Manufacturing of welded and seamless
steel pipes
Holding company and supplier of pipe
coating services
Manufacturing of welded steel pipes
Manufacturing of seamless steel pipes
Procurement and trading services
Manufacture and marketing of premium
connections
Manufacturing of welded and seamless
steel pipes
Manufacturing of seamless steel
products
Romania
Manufacturing of seamless steel pipes
Saudi Arabia Manufacturing of welded steel pipes
Manufacturing of welded steel pipes
Argentina
Indonesia
USA
USA
Percentage of ownership
at December 31, (*)
2023
2022
2021
100% 100% 100%
100%
NA
NA
100% 100% 100%
100% 100% 100%
50%
50%
50%
100% 100% 100%
100% 100% 100%
89%
89%
89%
100% 100% 100%
48%
48%
48%
100% 100% 100%
Argentina
Manufacturing of seamless steel pipes
100% 100% 100%
Portugal
Holding company
100% 100% 100%
USA
Netherlands
Uruguay
Canada
Manufacturing of welded and seamless
steel pipes
Development, management and
licensing of intellectual property
Financial company
Marketing of steel products
100% 100% 100%
100% 100% 100%
100% 100% 100%
100% 100% 100%
USA
Marketing of steel products
100% 100% 100%
TENARIS GLOBAL SERVICES S.A. and subsidiaries
Uruguay
TENARIS INVESTMENTS (NL) B.V. and subsidiaries
TENARIS GLOBAL SERVICES and INVESTMENTS
S.àr.l. and subsidiaries
United
Kingdom
Netherlands
Holding company and marketing of
steel products
Holding company, marketing and
distribution of steel products
Holding company
Luxembourg
Holding company
TENARIS QINGDAO STEEL PIPES LTD.
China
TENARIS TUBOCARIBE LTDA.
Colombia
Processing of premium joints, couplings
and automotive components
Manufacturing of welded and seamless
steel pipes
100% 100% 100%
100% 100% 100%
100% 100% 100%
100% 100% 100%
100% 100% 100%
100% 100% 100%
TUBOS DE ACERO DE MEXICO, S.A. and
subsidiaries
Mexico
Manufacturing of seamless steel pipes
100% 100% 100%
(*) All percentages rounded.
Tenaris holds 40% of Tubular Technical Services Ltd. and Pipe Coaters Nigeria Ltd., 49% of Tubulars Finishing Nigeria Limited, 49% of Amaja
Tubular Services Limited, 60% of Tenaris Baogang Baotou Steel Pipes Ltd. Until 2022 held 98.4% of Tenaris Supply Chain S.A. and, until 2021
held 49% of Tubular Services Angola Lda. after which years it started holding 100% of each of both companies.
(a) Tenaris holds 50% of the voting rights. The Company recognizes the assets, liabilities, revenue and expenses in relation to its interest in the
joint operation.
(b) Saudi Steel Pipe Co. is a public company listed in the Saudi Arabian Stock Exchange (Tadāwul), Tenaris holds 47.79% and has the right to
nominate the majority of the votes of the board of directors, therefore Tenaris has control over SSPC. Since May, 2023, Saudi Steel Pipe Co.
holds 57.3% of Global Pipe Company, therefore Tenaris has control over GPC.
(c) Until its liquidation in April 2023, Siderca held 51% of NKKTubes.
202
Consolidated Financial Statements
For the years ended 2023, 2022 and 2021 - all amounts in thousands of U.S. dollars, unless otherwise stated
34
Business combinations
The application of the purchase method requires certain estimates and assumptions, mainly concerning the
determination of the fair values of the acquired intangible assets, property, plant and equipment as well as the
liabilities assumed at the date of the acquisition, including the timing and amounts of cash flow projections, the
revenue growth rates, the customer attrition rates and the discount rate. The fair values determined at the
acquisition date are based on discounted cash flows and other valuation techniques.
The preliminary purchase price allocations were carried out with the assistance of third-party experts. Following IFRS
3, the Company will continue reviewing the allocations and make any necessary adjustments during the twelve
months following each of the acquisition dates.
Whenever applicable, Tenaris recognizes the non-controlling interest at the proportionate share of the acquiree’s
net identifiable assets.
Global Pipe Company acquisition
▪ Acquisition and price determination
On May 17, 2023, SSPC acquired 22.3% of the shares of GPC from Erndtebruecker Eisenwerk (“EEW”), a German
company that owned a 35% interest in GPC, for a purchase price of $6.3 million, paid in cash. SSPC already owned
35% interest in GPC, and, as a result of this transaction, SSPC currently holds a 57.3% interest in GPC.
The Company consolidates GPC’s balances and results of operations as from May 17, 2023. The acquired business,
which, contributed revenues of $144.2 million with a minor contribution to Tenaris’s results for the period starting
May 17, 2023 and ending December 31, 2023, were assigned to Tubes segment. Had the transaction been
consummated on January 1, 2023, then Tenaris’s unaudited pro forma net sales and net income would not have
changed materially.
▪ Fair value of net assets acquired
The allocation of the fair values determined for the assets and liabilities arising from the acquisition is as follows:
Fair value of acquired assets and liabilities as of acquisition date (May, 17, 2023):
Property, Plant and Equipment
Working capital
Cash and Cash Equivalents
Borrowings
Other assets and liabilities, net
Net assets acquired
$ million
173
34
2
(123)
(6)
80
Tenaris accounted for this transaction as a step-acquisition whereby Tenaris’s ownership interest in GPC held before
the acquisition, which amounted to $23.5 million, was remeasured to fair value at that date. As a result, Tenaris
recorded a gain of approximately $4.5 million resulting from the difference between the carrying value of its initial
investments in GPC and the fair value, which was included in Equity in earnings of non-consolidated companies in
the Consolidated Income Statement. The non-controlling interests in GPC amounted to $34.1 million.
The fair value of the net assets and liabilities acquired shown above amounted to approximately $80 million. As a
result of the acquisition, Tenaris recognized an additional gain for approximately $11.5 million also included in
Equity in earnings of non-consolidated companies in the Consolidated Income Statement.
Acquisition-related costs for the year ended 2022 were not material and for the year ended December 31, 2023,
amounted to $0.3 million and were included in general and administrative expenses.
SSPC and the other owners of GPC have issued corporate guarantees to secure the repayment of loan agreements
entered into by GPC with the Saudi Investment Development Fund, the Saudi British Bank, the National Commercial
Bank and Banque Saudi Fransi to finance GPC’s capital expenditures and working capital.
As a result of this acquisition, SSPC assumed a portion of EEW’s corporate guarantees. As of December 31, 2023,
SSPC’s aggregate exposure to GPC’s financial debt amounted to $72 million.
203
Consolidated Financial Statements
For the years ended 2023, 2022 and 2021 - all amounts in thousands of U.S. dollars, unless otherwise stated
Acquisition of Anticorrosion Coating Assets in Italy
▪ Acquisition and price determination
On July 1, 2023, an Italian subsidiary of the Company completed its previously announced acquisition of all of the
assets and related rights, duties, liabilities and contracts of Isoplus Mediterranean S.r.l.’s (“Isoplus”) anticorrosion
coating division for EUR9.0 million (approximately $9.8 million) paid in cash.
Isoplus was established in 2009 in Villamarzana in Italy. It operates in an area of about 65,000 square meters
(covered and uncovered) with pipe pre-insulation (district heating) and anticorrosive coating (oil & gas) production
lines.
The Company consolidated Isoplus anticorrosion coating division balances and results of operations as from July 1,
2023. The acquired business revenues, assigned to Tubes segment, were not material, with a minor contribution to
the Company’s results for the period starting July 1, 2023 and ending December 31, 2023. Had the transaction
been consummated on January 1, 2023, then Tenaris’s unaudited pro forma net sales and net income would not
have changed materially.
▪ Fair value of net assets acquired
The allocation of the fair values determined for the assets and liabilities arising from the acquisition is as follows:
Fair value of acquired assets and liabilities as of acquisition date (July, 1, 2023):
Property, Plant and Equipment
Working capital
Net assets acquired
$ million
11
2
13
The fair value of the net assets and liabilities acquired shown above amounted to approximately $13 million. As a
result of the acquisition, Tenaris recognized an additional gain for approximately $3.2 million also included in Other
Income and Expenses in the Consolidated Income Statement.
Acquisition-related costs for year ended December 31, 2023, were not material and were included in general and
administrative expenses.
Acquisition of Republic Tube pipe processing facility
▪ Acquisition and price determination
On September 6, 2023, a U.S. subsidiary of the Company acquired all of the assets and related rights, duties,
liabilities and contracts of Republic Tube LLC’s OCTG pipe processing facility in Houston, Texas. The final acquisition
price amounted to $90.5 million in cash.
The plant, located on the northeast side of Houston, adds heat treatment and finishing lines, further complementing
Tenaris’s existing operations, and increasing its capacity to serve the domestic market.
The Company consolidated the balances and results of operations of the acquired business as from September 6,
2023.
The acquired business revenues, assigned to Tubes segment, were not material, with a minor contribution to the
Company’s results for the period starting September 6, 2023, and ending December 31, 2023. Had the transaction
been consummated on January 1, 2023, then Tenaris’s unaudited pro forma net sales and net income would not
have changed materially.
▪ Fair value of net assets acquired
The allocation of the fair values determined for the assets and liabilities arising from the acquisition is as follows:
Fair value of acquired assets and liabilities as of acquisition date (September, 6, 2023):
Property, Plant and Equipment
Working capital
Other assets and liabilities, net
Net assets acquired
$ million
85
(1)
2
85
204
Consolidated Financial Statements
For the years ended 2023, 2022 and 2021 - all amounts in thousands of U.S. dollars, unless otherwise stated
The fair value of the net assets and liabilities acquired shown above amounted to approximately $85.5 million. As
a result of the acquisition, Tenaris recognized goodwill for approximately $5.0 million. The goodwill is deductible
for tax purposes.
The goodwill generated by the acquisition is mainly attributable to the synergy created following the integration
between the businesses, which is expected to enhance Tenaris’s position as well as its local manufacturing presence
in the U.S. market, and also expand its services capabilities.
Acquisition-related costs for the year ended December 31, 2023, amounted to $0.5 million and were included in
general and administrative expenses.
Acquisition of the Pipe Coating Business Unit of Mattr
▪ Acquisition and price determination
On November 30, 2023, Tenaris completed the acquisition of Mattr’s pipe coating business unit for $182.6 million
paid in cash. Under the purchase contract, the acquisition price was paid based on an estimated closing statement;
the final price is subject to a true-up adjustment based on actual amounts of cash, indebtedness, working capital
and certain other items as of the closing date, which are currently being assessed by management and will be
subsequently reviewed by the seller.
The business acquired includes nine plants located in Canada, Mexico, Norway, Indonesia, the UAE and the U.S.,
and several mobile concrete plants. The business also includes world-class R&D facilities in Toronto and Norway and
a wide IP/product portfolio.
The Company consolidated the balances and results of operations of the acquired business as from November 30,
2023.
The acquired business contributed revenues of $77.0 million mainly related to spot projects, with a minor
contribution to Tenaris’s results for the period starting November 30, 2023 and ending December 31, 2023, were
assigned to Others segment. Had the transaction been consummated on January 1, 2023, then Tenaris’s unaudited
pro forma net sales and net income would not have changed materially.
▪ Fair value of net assets acquired
The allocation of the fair values determined for the assets and liabilities arising from the acquisition is as follows:
Fair value of acquired assets and liabilities as of acquisition date (November 30, 2023):
Property, Plant and Equipment
Intangible assets
Working capital
Cash and Cash Equivalents
Provisions
Other assets and liabilities, net
Net assets acquired
$ million
126
29
(13)
21
(7)
13
169
The fair value of the net assets and liabilities acquired shown above amounted to approximately $169.0 million. As
a result of the acquisition, Tenaris recognized goodwill for approximately $13.6 million. The goodwill is not
deductible for tax purposes. The allocations of the purchase price will be finalized once all the information is
obtained, but not to exceed one year from the acquisition date.
Acquisition-related costs for the year ended December 31, 2023, amounted to $1.1 million and were included in
general and administrative expenses.
205
Consolidated Financial Statements
For the years ended 2023, 2022 and 2021 - all amounts in thousands of U.S. dollars, unless otherwise stated
35
Nationalization of Venezuelan subsidiaries
Following the nationalization by the Venezuelan government of the Company’s interests in its majority-owned
subsidiaries TAVSA - Tubos de Acero de Venezuela S.A. (“Tavsa”) and Matesi Materiales Siderúrgicos S.A (“Matesi”)
and in Complejo Siderúrgico de Guayana, C.A (“Comsigua”), the Company and its wholly-owned subsidiary Talta
- Trading e Marketing Sociedad Unipessoal Lda (“Talta”) initiated arbitration proceedings against Venezuela before
the ICSID in Washington D.C. in connection with these nationalizations and obtained favorable awards, which are
final and not subject to further appeals.
Matesi
On January 29, 2016, the tribunal released its award on the arbitration proceeding concerning the nationalization
of Matesi. The award upheld Tenaris’s and Talta’s claim and granted compensation in the amount of $87.3 million
for the breaches and ordered Venezuela to pay an additional amount of $85.5 million in pre-award interest,
aggregating to a total award of $173.0 million (including $0.2 million of legal fees), payable in full and net of any
applicable Venezuelan tax, duty or charge.
On June 8, 2018, Tenaris and Talta filed an action in federal court in the District of Columbia to recognize and
enforce the award in the United States. On July 17, 2020, the court entered judgment recognizing the Matesi
award. The judgment orders Venezuela to pay to Tenaris and Talta an amount of $256.4 million, including principal
and post-award interest through the judgment date, and provides for post-judgment interest to accrue on this sum
at the U.S. federal statutory rate.
Tavsa and Comsigua
On December 12, 2016, the tribunal issued its award upholding Tenaris’s and Talta’s claim and granted
compensation in the amount of $137.0 million and ordered Venezuela to pay an additional amount of $76.0 million
in pre-award interest and to reimburse Tenaris and Talta $3.3 million in legal fees and ICSID administrative costs. In
addition, Venezuela was ordered to pay interest from April 30, 2008, until the day of effective payment at a rate
equivalent to LIBOR + 4% per annum.
On June 8, 2018, Tenaris and Talta filed an action in federal court in the District of Columbia to recognize and
enforce the award in the United States. On March 29, 2021, the court granted Tenaris’s and Talta’s request to
recognize the Tavsa award and on August 24, 2021, the court entered judgment in favor of Tenaris and Talta and
against Venezuela in the amount of $276.9 million, with post-judgment interest accruing from the date of judgment
at the federal statutory post-judgment interest rate. On November 5, 2021, the court, in response to a motion by
Tenaris and Talta, amended the judgment amount to $280.7 million, with post-judgment interest continuing to
accrue from August 24, 2021, at the federal statutory post-judgment interest rate.
Transfer of the Awards and Judgements
On January 25, 2023, Tenaris and Talta entered into an awards purchase agreement with an unaffiliated purchaser
pursuant to which Tenaris and Talta agreed to sell all of their rights, title and interests in the above-referenced
claims, awards and judgements, including all post-award or post-judgement interest accruing on the awards and
judgements, for a purchase price of $81 million, plus a non-refundable signing payment of $1 million as
reimbursement of expenses.
After the U.S. Office of Foreign Assets Control approved the transfer of the awards and judgements to the
purchaser, the transfer was consummated on September 7, 2023. As a result, the Company collected $82 million
in the year ended December 31, 2023. The Company does not maintain any residual interest in these awards and
judgements. The net result derived from this operation amounted to $33.3 million.
206
Consolidated Financial Statements
For the years ended 2023, 2022 and 2021 - all amounts in thousands of U.S. dollars, unless otherwise stated
36
Termination of NKKTubes joint venture
NKKTubes, a company owned 51% by Tenaris and 49% by JFE Holdings Inc. (“JFE”), used to operate a seamless
pipe manufacturing facility in Japan, located in the Keihin steel complex owned by JFE. On March 27, 2020, JFE
informed Tenaris of its decision to permanently cease as from JFE’s fiscal year ending March 2024 the operations
of its steel manufacturing facilities located at the Keihin complex. On November 2, 2021, Tenaris and JFE agreed to
terminate amicably their joint venture and liquidate NKKTubes. On November 2, 2022, Tenaris and JFE entered into
a definitive wrap-up agreement. NKKTubes was liquidated on April 28, 2023.
37
Share Buyback Program
On November 1, 2023, the Company’s board of directors approved a share buyback program of up to $1.2 billion
(which, at the closing price of November 1, 2023 on the Milan Stock Exchange, would represent approximately
75.4 million shares, or 6.4% of the outstanding shares), to be executed within a year, with the intention to cancel
the ordinary shares acquired through the program.
The buyback program is being carried out under the authority granted by the annual general meeting of
shareholders held on June 2, 2020, which may be renewed or extended, up to a maximum of 10% of the
Company’s shares. The buybacks may be ceased, paused and continued at any time, subject to compliance with
applicable laws and regulations.
The program is divided into tranches. For purposes of carrying out the first tranche of the buyback program, Tenaris
entered into a non-discretionary buyback agreement with a primary financial institution that makes trading decisions
concerning the timing of the purchases of Tenaris’s ordinary shares independently of and uninfluenced by Tenaris
and must act in compliance with applicable rules and regulations, including the Market Abuse Regulation 596/2014
and the Commission Delegated Regulation (EU) 2016/1052. Under the buyback agreement, purchases of shares
may continue during any blackout periods.
During 2023, the Company purchased 12,648,091 shares, for a value of $213.7 million. As of December 31, 2023,
the Company held a liability in connection to the shares to be settled under the first tranche of the buyback program
that amounted to $86.2 million. On January 12, 2024, the first tranche of the share buyback program was
completed.
Further information on the buyback transactions is available on Tenaris’s corporate website under the Share Buyback
Program Section.
38
Climate change
Tenaris carefully assesses the potential impact of climate change and energy transition on its business and on the
risks to its markets and its tangible and intangible assets, and adapts its business strategy accordingly.
In February 2021 Tenaris set a medium-term target to reduce its carbon emissions intensity rate by 30% by 2030,
compared to a 2018 baseline, considering Scopes 1 and 2 emissions plus Scope 3 emissions related to raw materials
and steel purchased from third parties. Tenaris encourages the use of sustainable practices among its suppliers and,
in March 2023, it adopted a Sustainable Sourcing Policy to enhance its efforts in this area. The new Sustainability
Sourcing Policy will help Tenaris to understand better the real emission levels of its suppliers and identify further
opportunities for improvement. The Company aims to achieve this target by using a higher proportion of recycled
steel scrap in the metallic mix and by making investments to increase energy efficiency and the use of renewable
energy in its energy requirements.
In particular, a large proportion of these investments are being directed to installing renewable energy capacity for
use in the Company’s operations. In October 2023, following an investment of approximately $200 million, Tenaris
put into operation a wind farm in Argentina, which supplies 103.2 MW of power, or close to 50% of its total
electric power requirements, through the interconnected grid, to its industrial facilities in Campana. The wind farm
will reduce Tenaris’s CO2 emissions at the facility by 152,000 tons per year compared to 2018. In November 2023
the Company’s Board of Directors approved an investment plan to build a second wind farm in Argentina at a cost
of approximately $214 million, which would supply a further 30% of the current energy requirements of its facilities
in Campana, and reduce Tenaris’s CO2 emissions by a further 102,500 tons per year. The medium-term target forms
part of a broader objective of decarbonizing our operations and reaching carbon neutrality. At the same time, the
Company is increasing its sales for low-carbon energy applications, such as hydrogen, geothermal and carbon
capture and storage. These sales currently account for a relatively small proportion of overall sales but are expected
to grow in the coming years.
207
Consolidated Financial Statements
For the years ended 2023, 2022 and 2021 - all amounts in thousands of U.S. dollars, unless otherwise stated
In its assessment, Tenaris also considers that the countries in which it operates and its customers are also establishing
their own decarbonization strategies and objectives, and that some customers are requesting specific information
from their suppliers, including Tenaris, concerning the carbon emissions and Environmental, Social and Governance
(“ESG”) practices in their supply chain, and that they may adjust their supply practices in light of that information.
The recoverable value assessments performed by the Company for purposes of the preparation of these financial
statements reflects management’s views on energy transition and climate change and their potential medium- and
long-term impact on Tenaris’s operations and its sales. In addition, the Company carefully monitors the medium-
and long-term outlook scenarios published by leading industry experts on how the energy transition could affect
global demand for energy and oil and gas and how this could affect the global demand for tubular products and
its sales. Furthermore, estimates and assumptions used in the Company’s impairment tests over long-lived assets
and goodwill, useful lives of assets, capital and research and development expenditures, inventory valuation,
recovery of deferred tax assets and provisions, and contingent liabilities are based on available information and
current government regulations on energy transition and climate-related matters, as well as on Tenaris’s current
short-term investment plans. As of the date of these financial statements, the Company does not believe that
climate-related matters should trigger any material adjustments to the conclusions of its impairment tests or the
valuation of the above mentioned areas.
39
Events after the reporting period
Annual Dividend Proposal and Second Tranche of Share Buyback Program 8
Upon approval of the Company´s annual accounts in March 2024, the Board of Directors intends to propose, for
the approval of the Annual General Shareholders' meeting to be held on April 30, 2024, the payment of an annual
dividend of $0.60 per share ($1.20 per ADS), or approximately $700 million, which includes the interim dividend of
$0.20 per outstanding share ($0.40 per ADS) or approximately $235 million, paid on November 22, 2023. If the
annual dividend is approved by the shareholders, a dividend of $0.40 per share ($0.80 per ADS), or approximately
$465 million will be paid on May 22, 2024, with an ex-dividend date of May 20, 2024. These Consolidated Financial
Statements do not reflect this dividend payable.
The second $300 million tranche of the Company’s previously announced $1.2 billion share buyback program began
on Monday, February 26, 2024, and is expected to end no later than May 24, 2024.
Alicia Móndolo
Chief Financial Officer
8 This note was updated subsequently to the approval of these Consolidated Financial Statements by the Company’s Board of Directors on
February 21, 2024.
208
Annual Accounts (Luxembourg GAAP)
Tenaris S.A.
ANNUAL ACCOUNTS
as at December 31, 2023
26, Boulevard Royal - 4th Floor
L-2449 - Luxembourg
R.C.S. Luxembourg: B 85203
209
Audit report
To the Shareholders of
TENARIS S.A.
Report on the audit of the annual accounts
Our opinion
In our opinion, the accompanying annual accounts give a true and fair view of the financial position of
TENARIS S.A. (the “Company”) as at 31 December 2023, and of the results of its operations for the
year then ended in accordance with Luxembourg legal and regulatory requirements relating to the
preparation and presentation of the annual accounts.
Our opinion is consistent with our additional report to the Audit Committee of the Company’s Board of
Directors (the “Audit Committee”).
What we have audited
The Company’s annual accounts comprise:
•
•
•
the balance sheet as at 31 December 2023;
the profit and loss account for the year then ended; and
the notes to the annual accounts, which include a summary of significant accounting policies.
Basis for opinion
We conducted our audit in accordance with the EU Regulation No 537/2014, the Law of 23 July 2016
on the audit profession (Law of 23 July 2016) and with International Standards on Auditing (ISAs) as
adopted for Luxembourg by the “Commission de Surveillance du Secteur Financier” (CSSF). Our
responsibilities under the EU Regulation No 537/2014, the Law of 23 July 2016 and ISAs as adopted
for Luxembourg by the CSSF are further described in the “Responsibilities of the “Réviseur d’entreprises
agréé” for the audit of the annual accounts” section of our report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our opinion.
We are independent of the Company in accordance with the International Code of Ethics for Professional
Accountants, including International Independence Standards, issued by the International Ethics
Standards Board for Accountants (IESBA Code) as adopted for Luxembourg by the CSSF together with
the ethical requirements that are relevant to our audit of the annual accounts. We have fulfilled our other
ethical responsibilities under those ethical requirements.
To the best of our knowledge and belief, we declare that we have not provided non-audit services that
are prohibited under Article 5(1) of the EU Regulation No 537/2014.
The non-audit services that we have provided to the Company for the year ended 31 December 2023,
are disclosed in Note 10 to the annual accounts.
PricewaterhouseCoopers, Société coopérative, 2 rue Gerhard Mercator, B.P. 1443, L-1014 Luxembourg
T : +352 494848 1, F : +352 494848 2900, www.pwc.lu
Cabinet de révision agréé. Expert-comptable (autorisation gouvernementale n°10028256)
R.C.S. Luxembourg B 65 477 - TVA LU25482518
The non-audit services rendered by PwC Network firms to the Company and its controlled undertakings,
for the year ended 31 December 2023, are disclosed in Note 32 to the Company’s consolidated financial
statements.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our
audit of the annual accounts of the current period. These matters were addressed in the context of our
audit of the annual accounts as a whole, and in forming our opinion thereon, and we do not provide a
separate opinion on these matters.
Key audit matter
How our audit addressed the key audit matter
Recoverability of
in affiliated
undertakings - Tenaris Global Services and
Investments S.à r.l.
the shares
Note 3 to the annual accounts indicates that as
of 31 December 2023, TENARIS S.A. holds
100% interest in the unlisted company Tenaris
Investments S.à r.l.
Global Services and
(Tenaris
investment
represents 99% of the total assets of the
Company. The carrying value of the investment
amounts to 17,169 million USD.
Investments).
This
including
The investment in Tenaris Investments is
the
valued at contribution price
expenses incidental thereto. At the end of each
accounting period, the investment is subject to
a valuation review. In case of other than a
temporary decline in value, its carrying value is
reduced to recognise this decline. If the reasons
that triggered the value adjustments cease to
exist,
these value adjustments may be
reversed.
As of 31 December 2023, Management has
assessed
its
investment and recorded a reversal of value
adjustment of 3,705 million USD.
recoverable value of
the
We focused our audit on the recoverability of
this
financial
significance over the total assets.
investment value given
its
Our audit approach included:
• obtaining an understanding of Management’s
the
the valuation of
process
investment in Tenaris Investments;
related
to
• assessing the valuation of the investment in
Tenaris Investments by comparing its carrying
value with Tenaris Investments' net assets as
obtained from its audited annual accounts; and
• evaluating the appropriateness of the related
disclosures in Note 2 (Summary of significant
accounting policies) and Note 3 (Financial
assets) to the annual accounts.
211
Other information
The Board of Directors is responsible for the other information. The other information comprises the
information stated in the annual report including the consolidated management report and the Corporate
Governance Statement but does not include the annual accounts and our audit report thereon.
Our opinion on the annual accounts does not cover the other information and we do not express any
form of assurance conclusion thereon.
In connection with our audit of the annual accounts, our responsibility is to read the other information
identified above and, in doing so, consider whether the other information is materially inconsistent with
the annual accounts or our knowledge obtained in the audit, or otherwise appears to be materially
misstated. If, based on the work we have performed, we conclude that there is a material misstatement
of this other information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the Board of Directors and those charged with governance for the annual
accounts
The Board of Directors is responsible for the preparation and fair presentation of the annual accounts in
accordance with Luxembourg legal and regulatory requirements relating to the preparation and
presentation of the annual accounts, and for such internal control as the Board of Directors determines
is necessary to enable the preparation of annual accounts that are free from material misstatement,
whether due to fraud or error.
In preparing the annual accounts, the Board of Directors is responsible for assessing the Company’s
ability to continue as a going concern, disclosing, as applicable, matters related to going concern and
using the going concern basis of accounting unless the Board of Directors either intends to liquidate the
Company or to cease operations, or has no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Company’s financial reporting
process.
The Board of Directors is responsible for presenting the annual accounts in compliance with the
requirements set out in the Delegated Regulation 2019/815 on European Single Electronic Format
(“ESEF Regulation”).
Responsibilities of the “Réviseur d’entreprises agréé” for the audit of the annual accounts
The objectives of our audit are to obtain reasonable assurance about whether the annual accounts as
a whole are free from material misstatement, whether due to fraud or error, and to issue an audit report
that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee
that an audit conducted in accordance with the EU Regulation No 537/2014, the Law of 23 July 2016
and with ISAs as adopted for Luxembourg by the CSSF will always detect a material misstatement when
it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the
aggregate, they could reasonably be expected to influence the economic decisions of users taken on
the basis of these annual accounts.
212
As part of an audit in accordance with the EU Regulation No 537/2014, the Law of 23 July 2016 and
with ISAs as adopted for Luxembourg by the CSSF, we exercise professional judgment and maintain
professional scepticism throughout the audit. We also:
•
identify and assess the risks of material misstatement of the annual accounts, whether due to fraud
or error, design and perform audit procedures responsive to those risks, and obtain audit evidence
that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material
misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve
collusion, forgery, intentional omissions, misrepresentations, or the override of internal control;
• obtain an understanding of internal control relevant to the audit in order to design audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Company’s internal control;
• evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the Board of Directors;
• conclude on the appropriateness of the Board of Directors’ use of the going concern basis of
accounting and, based on the audit evidence obtained, whether a material uncertainty exists related
to events or conditions that may cast significant doubt on the Company’s ability to continue as a
going concern. If we conclude that a material uncertainty exists, we are required to draw attention in
our audit report to the related disclosures in the annual accounts or, if such disclosures are
inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to
the date of our audit report. However, future events or conditions may cause the Company to cease
to continue as a going concern;
• evaluate the overall presentation, structure and content of the annual accounts, including the
disclosures, and whether the annual accounts represent the underlying transactions and events in a
manner that achieves fair presentation.
We communicate with those charged with governance regarding, among other matters, the planned
scope and timing of the audit and significant audit findings, including any significant deficiencies in
internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant
ethical requirements regarding independence, and communicate to them all relationships and other
matters that may reasonably be thought to bear on our independence, and where applicable, actions
taken to eliminate threats or safeguards applied.
From the matters communicated with those charged with governance, we determine those matters that
were of most significance in the audit of the annual accounts of the current period and are therefore the
key audit matters. We describe these matters in our audit report unless law or regulation precludes
public disclosure about the matter.
We assess whether the annual accounts have been prepared, in all material respects, in compliance
with the requirements laid down in the ESEF Regulation.
213
Report on other legal and regulatory requirements
The consolidated management report is consistent with the annual accounts and has been prepared in
accordance with applicable legal requirements.
The Corporate Governance Statement is included in the consolidated management report. The
information required by Article 68ter Paragraph (1) Letters c) and d) of the Law of 19 December 2002
on the commercial and companies register and on the accounting records and annual accounts of
undertakings, as amended, is consistent with the annual accounts and has been prepared in accordance
with applicable legal requirements.
We have been appointed as “Réviseur d’Entreprises Agréé” by the General Meeting of the Shareholders
on 3 May 2023 and the duration of our uninterrupted engagement, including previous renewals and
reappointments, is 22 years.
We have checked the compliance of the annual accounts of the Company as at 31 December 2023 with
relevant statutory requirements set out in the ESEF Regulation that are applicable to annual accounts.
For the Company it relates to the requirement that annual accounts are prepared in a valid XHTML
format.
In our opinion, the annual accounts of the Company as at 31 December 2023 have been prepared, in
all material respects, in compliance with the requirements laid down in the ESEF Regulation.
PricewaterhouseCoopers, Société coopérative
Represented by
Luxembourg, 22 March 2024
@esig
@
Gilles Vanderweyen
214
Annual Accounts – Tenaris S.A.
December 31, 2023 - all amounts in U.S. dollars, unless otherwise stated
BALANCE SHEET
ASSETS
Fixed assets
Financial assets
Shares in affiliated undertakings
Current assets
Debtors
Other debtors
a) becoming due and payable within one year
Investments
Own shares
III.
2.
IV. Cash at bank and in hand
E.
Prepayments
Total assets
CAPITAL, RESERVES AND LIABILITIES
Capital and reserves
Subscribed capital
Share premium account
Reserves
Legal reserve
Reserve for own shares
Profit brought forward
Profit or (loss) for the financial year
Interim dividends
C.
III.
1.
D.
II.
4.
A.
I.
II.
IV.
1.
2.
V.
VI.
VII.
C.
6.
8.
December, 31
2023
USD
December, 31
2022
USD
Note(s)
3
16
22
4/5/6/7/8
22
17,169,329,696
17,169,329,696
14,348,397,627
14,348,397,627
10,190,804
2,385
213,738,593
15,341,349
44,495
239,315,241
17,408,644,937
-
344,039
43,128
389,552
14,348,787,179
1,180,536,830
609,732,757
1,180,536,830
609,732,757
118,053,683
213,738,593
11,769,424,318
3,695,349,742
(235,128,494)
17,351,707,429
118,053,683
-
12,717,815,659
(132,578,965)
(200,691,261)
14,292,868,703
Creditors
Amounts owed to affiliated undertakings
a) becoming due and payable within one year
b) becoming due and payable after more than one year
Other creditors
a) Tax authorities
c) Other creditors
i) becoming due and payable within one year
ii) becoming due and payable after more than one year
Total capital, reserves and liabilities
9
9
23,222,995
13,202,630
23,056,572
13,119,049
-
5,136
19,117,679
1,394,204
56,937,508
17,408,644,937
18,698,993
1,038,726
55,918,476
14,348,787,179
The accompanying notes are an integral part of these annual accounts.
215
Annual Accounts – Tenaris S.A.
December 31, 2023 - all amounts in U.S. dollars, unless otherwise stated
PROFIT AND LOSS ACCOUNT
Other operating income
Other external expenses
Staff costs
Other operating expenses
4.
5.
6.
8.
11. Other interest receivable and similar income
b) other interest and similar income
13. Reversal of value adjustments in Shares in affiliated
14.
undertakings
Interest payable and similar expenses
a) concerning affiliated undertakings
b) other interest and similar expenses
16. Profit or (loss) after taxation
17. Other taxes not shown under items 1 to 16
18. Profit or (loss) for the financial year
Note(s)
10
10
11
12
For the year ended
December, 31
2023
USD
For the year ended
December, 31
2022
USD
1,764,013
(6,880,561)
(1,532,665)
(39,959,381)
1,162,434
(97,547,508)
(1,145,081)
(33,555,304)
2,079,845
733,810
3/19
3,746,857,369
-
13
14
(6,862,542)
(116,336)
3,695,349,742
-
3,695,349,742
(2,220,427)
(1,753)
(132,573,829)
(5,136)
(132,578,965)
The accompanying notes are an integral part of these annual accounts.
216
Annual Accounts – Tenaris S.A.
December 31, 2023 - all amounts in U.S. dollars, unless otherwise stated
NOTES TO THE ANNUAL ACCOUNTS
Note 1 – General information
Tenaris S.A. (the “Company” or “Tenaris”) was established on December 17, 2001 under the name of Tenaris
Holding S.A. as a public limited liability company under Luxembourg’s 1929 holding company regime (société
anonyme holding). On June 26, 2002, the Company changed its name to Tenaris S.A. On January 1, 2011, the
Company became an ordinary public limited liability company (société anonyme).
Tenaris’s object is to invest mainly in companies that manufacture and market steel tubes and other related
businesses.
The financial year starts on January 1 and ends on December 31 of each year.
Tenaris prepares and publishes consolidated financial statements which include further information on Tenaris and
its subsidiaries. The consolidated financial statements are available at the registered office of the Company, 26,
Boulevard Royal – 4th floor, L-2449, Luxembourg, Grand-Duchy of Luxembourg.
Note 2 – Summary of significant accounting policies
2.1
Basis of presentation
These annual accounts have been prepared in accordance with Luxembourg legal and regulatory requirements
under the historical cost convention.
Accounting policies and valuation rules are, besides the ones laid down by the law of 19 December 2002,
determined and applied by the Board of Directors.
The preparation of these annual accounts requires management to make certain accounting estimates and
assumptions that might affect the reported amounts of assets and liabilities and the disclosure of contingent
liabilities at the reporting dates, and the reported amounts of income and charges during the reporting years. Actual
results may differ from these estimates. The main area involving significant estimates or judgements is valuation of
financial assets. During the year there were no material changes in the significant accounting estimates.
2.2
Foreign currency translation
The books and records are maintained in United States Dollar (“USD”) and the annual accounts have been prepared
in accordance with the valuation rules and accounting policies described below. Unless otherwise stated, all
amounts presented in these annual accounts are in USD, which is the reporting currency of the Company.
Assets and liabilities denominated in currencies other than the USD are translated into USD at the rate of exchange
at the balance sheet date except for tangible and intangible fixed assets and shares in affiliated undertakings which
remain at the historical exchange rate on the day of incorporation. The resulting gains or losses are reflected in the
Profit and loss account for the financial year when they are realized. Solely the unrealized exchange losses are
recorded in the profit and loss account. Income and expenses in currencies other than the USD are translated into
USD at the exchange rate prevailing at the date of each transaction.
2.3
Financial assets
Shares in affiliated undertakings are valued at purchase or contribution price including the expenses incidental
thereto.
The Company conducts value adjustment tests on its financial assets in accordance with Luxembourg legal and
regulatory requirements.
In case of other than a temporary decline in respect of the financial assets value, its carrying value will be reduced
to recognize this decline. If there is a change in the reasons for which the value adjustments were made, these
adjustments could be reversed, if appropriate.
217
Annual Accounts – Tenaris S.A.
December 31, 2023 - all amounts in U.S. dollars, unless otherwise stated
2.4
Debtors
Debtors are valued at their nominal value. They are subject to value adjustments whenever their recovery is
compromised. These value adjustments are not continued if the reasons for which the value adjustments were made
have ceased to apply.
2.5
Investments
Investments represent own shares and are valued at purchase price including the expenses incidental thereto.
2.6
Cash at bank and in hand
Cash at bank and in hand mainly comprise cash at bank and liquidity funds. Assets recorded in cash at bank and in
hand are carried at historical cost which approximates fair market value.
2.7
Creditors
Creditors are stated at their nominal value.
Note 3 – Financial assets
Shares in affiliated undertakings
Tenaris holds 100% of the shares of Tenaris Global Services and Investments S.à r.l. (formerly Tenaris Investments
S.à r.l.) with registered office in Luxembourg and holds, indirectly through this wholly-owned subsidiary, 100% of
the shares of Confab Industrial S.A., Inversiones Lucerna Limitada, Maverick Tube Corporation, Siderca S.A.I.C.,
Algoma Tubes Inc., Management Solutions Services Inc., Tenaris Investments (NL) B.V., Tenaris Connections B.V.,
Tenaris Financial Services S.A., Tenaris Global Services Far East Pte. Ltd., Tenaris Global Services Norway A.S., Tenaris
Global Services (UK) Ltd., Tenaris Global Services de Bolivia S.R.L., Tenaris Global Services Ecuador S.A., Tenaris
Global Services Nigeria limited, Tenaris Qingdao Steel Pipes Ltd., Socominter S.A. and Tenaris Global Services Chile
Limitada, 50% of the shares of Exiros B.V. and 11.5% of the shares of Ternium S.A.
Movements during the financial year are as follows:
Gross book value - opening balance
Decreases for the financial year (*)
Gross book value - closing balance
Accumulated value adjustments - opening balance
Allocations for the financial year (**)
Accumulated value adjustments - closing balance
Net book value - opening balance
Net book value - closing balance
USD
19,676,980,319
(884,825,300)
18,792,155,019
(5,328,582,692)
3,705,757,369
(1,622,825,323)
14,348,397,627
17,169,329,696
(*) On December 7, 2010, Tenaris entered into a master credit agreement with Tenaris Global Services and
Investments S.à r.l. pursuant to which, upon request from Tenaris, Tenaris Global Services and Investments S.à r.l.
may, but shall not be required to, from time to time, make loans to Tenaris. Any loan under the master credit
agreement may be repaid or prepaid from time to time through a reduction of the capital of Tenaris Global Services
and Investments S.à r.l. by an amount equivalent to the amount of the loan then outstanding (including accrued
interest). As a result of reductions in the capital of Tenaris Global Services and Investments S.à r.l. made during the
financial year ended December 31, 2023, in connection with cancellations of loans to Tenaris, the value of the
participation of Tenaris in Tenaris Global Services and Investments S.à r.l. decreased by USD 885 million.
(**) The management of the Company has assessed the recoverable value of its investment and recorded an
impairment reversal of USD 3.7 billion as of December 31, 2023.
As of December 31, 2023 Tenaris Global Services and Investments S.à r.l. reported an equity of USD 17.2 billion
and an income for the financial year of USD 3.1 billion.
218
Annual Accounts – Tenaris S.A.
December 31, 2023 - all amounts in U.S. dollars, unless otherwise stated
Note 4 – Capital and reserves
The authorized capital of the Company amounts to USD 2.5 billion. The total authorized share capital of the
Company is represented by 2,500,000,000 shares with a par value of USD 1.00 per share. Total ordinary shares
issued as of December 31, 2023 and 2022 were 1,180,536,830 with a par value of USD 1.00 per share with one
vote each. Total ordinary shares, excluding own shares, as of December 31, 2023, were 1,167,888,739 and as of
December 31, 2022 were 1,180,536,830 with a par value of USD 1.00 per share with one vote each.
The Board of Directors is authorized until June 12, 2025, to increase the issued share capital, through issues of
shares within the limits of the authorized capital.
Following the completion of the corporate reorganization, and upon its conversion into an ordinary Luxembourg
holding company, the Company recorded a special reserve for tax purposes in a significant amount.
Note 5 – Legal reserve
In accordance with Luxembourg law, the Company is required to set aside a minimum of 5% of its annual net profit
for each financial year to a legal reserve. This requirement ceases to be necessary once the balance on the legal
reserve has reached 10% of the issued share capital. The Company’s reserve has already reached this 10%. If the
legal reserve later falls below the 10% threshold, at least 5% of net profits must be allocated to the reserve. The
legal reserve is not available for distribution to the shareholders.
Note 6 – Reserve for own shares
The Company purchased during the year own shares for an amount of USD 213,738,593 included in “Investments”
in the balance sheet.
In accordance with the law, the Company has created a non-distributable reserve included in the account “Reserve
for own shares” for an amount of USD 213,738,593.
Note 7 – Distributable amounts
Dividends may be paid by Tenaris upon the ordinary shareholders’ meeting approval to the extent distributable
retained earnings exist.
At December 31, 2023, the Company’s profit brought forward after the income and the deduction of the interim
dividend for the financial year totaled approximately USD 15.2 billion and the share premium reserve which is also
distributable, amounted to USD 0.6 billion.
Note 8 – Dividend payment
On November 1, 2023, the Company’s Board of Directors approved the payment of an interim dividend of USD
0.20 per outstanding share (USD 0.40 per ADS), or approximately USD 235 million, paid on November 22, 2023,
with an ex-dividend date of November 20, 2023.
On May 3, 2023, the Company’s Shareholders approved an annual dividend in the amount of USD 0.51 per share
(USD 1.02 per ADS). The amount approved by the Shareholders included the interim dividend previously paid in
November 23, 2022 in the amount of USD 0.17 per share (USD 0.34 per ADS). The balance, amounting to USD
0.34 per share (USD 0.68 per ADS), was paid on May 24, 2023, for an amount of approximately USD 401 million.
In the aggregate, the interim dividend paid in November 2022 and the balance paid in May 2023 amounted to
approximately USD 602 million.
On May 3, 2022, the Company’s Shareholders approved an annual dividend in the amount of USD 0.41 per share
(USD 0.82 per ADS). The amount approved included the interim dividend previously paid in November 24, 2021 in
the amount of USD 0.13 per share (USD 0.26 per ADS). The balance, amounting to USD 0.28 per share (USD 0.56
per ADS), was paid on May 25, 2022, for an amount of approximately USD 331 million. In the aggregate, the
interim dividend paid in November 2021 and the balance paid in May 2022 amounted to approximately USD 484
million.
219
Annual Accounts – Tenaris S.A.
December 31, 2023 - all amounts in U.S. dollars, unless otherwise stated
Note 9 – Creditors: Amounts owed to affiliated undertakings
Within a
year
USD
After more
than one year
and within
five years
USD
After more
than five
years
Total at
December
31, 2023
Total at
December
31, 2022
USD
USD
USD
Creditors becoming due and payable
Tenaris Solutions Uruguay S.A.
Siderca S.A.I.C.
Management Solutions Services, Inc.
Tenaris Global Services and Investments S.à r.l.
Dalmine S.p.A.
Tubos de Acero de México, S.A.
Others
Total
7,417,305
10,202,278
1,288,166
-
3,819,062
484,924
11,260
23,222,995
2,184,241
1,031,796
5,079,013
- 3,562,094
1,345,486
-
-
-
-
-
-
-
-
3,216,037
9,986,593
14,680,559
13,764,372
3,665,448
-
3,819,062
484,924
11,260
36,425,625
12,027,565
12,802,445
1,784,004
5,012,759
4,271,581
267,767
9,500
36,175,621
Note 10 – Other operating income and other external expenses
Other operating income
Collection from ADR Program
Claim collection
Other income
Other external expenses
Professional services and fees
Other services and fees
Other expenses
2023
USD
2022
USD
932,082
831,876
55
1,764,013
(4,830,516)
(889,561)
(1,160,484)
(6,880,561)
(5,116,548)
1,162,434
-
-
1,162,434
(8,335,695)
(806,076)
(88,405,737)
(97,547,508)
(96,385,074)
Professional services and fees: the total fees for the financial year received by the auditor PwC Luxembourg
amounted USD 1.5 million including USD 156 thousand related to statutory auditor's other assurance services. Total
fees accrued for professional services rendered by PwC Network firms to Tenaris and its subsidiaries are disclosed
in note 32 to the Company’s consolidated financial statements.
It also includes legal consultancy fees with various suppliers for USD 1.2 million and USD 5.0 million for 2023 and
2022, respectively.
Other expenses: For the year 2022, includes an extraordinary charge of USD 78.1 million. For more information see
note 18 “Petrobras-related proceedings and claims”.
Note 11 – Staff costs
Staff costs include salaries, social security on salaries and other charges. As of December 31, 2023 and 2022 the
number of employees was 2 (average 2023 and 2022: 2 employees).
Note 12 – Other operating expenses
Senior Management compensation and others
Board of Directors' accrued fees
Others
2023
USD
(35,871,332)
(1,381,820)
(2,706,229)
(39,959,381)
2022
USD
(30,370,155)
(1,476,465)
(1,708,684)
(33,555,304)
220
Annual Accounts – Tenaris S.A.
December 31, 2023 - all amounts in U.S. dollars, unless otherwise stated
Note 13 – Interest payable concerning affiliated undertakings
Interests payable concerning affiliated undertaking are referred to intercompany loans from Tenaris Global Services
and Investments S.à r.l.
Note 14 – Taxes
The Company is liable to all taxes applicable to a Luxembourg "Société Anonyme". For the financial year ended
December 31, 2023, the Company did not realize any profits subject to tax in Luxembourg.
In December 2021, the Organization for Economic Co-operation and Development (“OECD”) released the Pillar
Two model rules (the Global Anti-Base Erosion rules, or “GloBE”) to reform international corporate taxation.
Following Pillar Two OECD’s initiative, the European Union adopted in December 2022 a directive to impose a global
minimum taxation for multinational companies in the Union, to be effective as from 2024. On December 20, 2023,
the Luxembourg Parliament approved the Pillar Two law transposing the EU Pillar Two Directive into domestic
legislation. The law enters into force as from fiscal years starting on or after December 31, 2023.
The Company is within the scope of the rules, and therefore will be required to calculate its GloBE effective tax rate
for each jurisdiction where it operates and will be liable to pay a top-up tax for the difference between its GloBE
effective tax rate per jurisdiction and the 15% minimum rate, as from 2024.
No current tax impacts have arisen in the current Annual Accounts as of December 31, 2023, due to the application
of Pillar Two rules, as they will be applicable as from 2024 in jurisdictions relevant for the Company.
The Company is in the process of assessing its exposure to the Pillar Two legislation and testing its situation under
the OECD transitional safe harbor rules and expects no major impacts in relation to top-up tax due to the application
of one or more of the transitional safe harbor rules.
Note 15 – Parent Company
Tenaris’s controlling shareholders as of December 31, 2023 were as follows:
▪
▪
San Faustin S.A., a Luxembourg société anonyme (“San Faustin”), owned 713,605,187 shares in the
Company, representing 60.45% of the Company’s capital and 61.10% of the voting rights.
San Faustin owned all of its shares in the Company through its wholly-owned subsidiary Techint Holdings
S.à.r.l., a Luxembourg société à responsabilité limitée (“Techint”), who is the holder of record of the above-
mentioned Tenaris shares.
▪ Rocca & Partners Stichting Administratiekantoor Aandelen San Faustin, a private foundation located in the
Netherlands (Stichting) (“RP STAK”) held voting shares in San Faustin sufficient in number to control San
Faustin.
▪ No person or group of persons controls RP STAK.
Based on the information most recently available to the Company, Tenaris’s directors and senior management as a
group owned 0.07% of the Company’s issued shares.
Note 16 – Putative class actions
Following the Company’s November 27, 2018, announcement that its Chairman and CEO Paolo Rocca had been
included in an Argentine court investigation known as the Notebooks Case (a decision subsequently reversed by a
higher court), two putative class action complaints were filed in the U.S. District Court for the Eastern District of
New York. On April 29, 2019, the court consolidated the complaints into a single case, captioned “In re Tenaris
S.A. Securities Litigation”, and appointed lead plaintiffs and lead counsel.
221
Annual Accounts – Tenaris S.A.
December 31, 2023 - all amounts in U.S. dollars, unless otherwise stated
On July 19, 2019, the lead plaintiffs filed an amended complaint purportedly on behalf of purchasers of Tenaris
securities during the putative class period of May 1, 2014, through December 5, 2018. The individual defendants
named in the complaint are Tenaris’s Chairman and CEO and Tenaris’s former CFO. The complaint alleges that
during the class period, the Company and the individual defendants inflated the Tenaris share price by failing to
disclose that the nationalization proceeds received by Ternium (in which the Company held an 11.46% stake) when
Sidor was expropriated by Venezuela were received or expedited as a result of allegedly improper payments made
to Argentine officials. The complaint does not specify the damages that plaintiff is seeking.
On October 9, 2020, the court granted in part and denied in part the defendants’ motions to dismiss. The court
partially granted and partially denied the motion to dismiss the claims against the Company and its Chairman and
CEO. In addition, the court granted the motions to dismiss as to all claims against San Faustin, Techint, and Tenaris’s
former CFO.
On November 11, 2022, the parties filed a joint notice of settlement announcing a settlement in principle of all
claims in the action, subject to finalizing the settlement agreements and court approval. The parties’ agreement in
principle provides that, in exchange for dismissal of the action and customary releases from class members and with
no admission of liability by Tenaris or Mr. Rocca, Tenaris will pay to the class USD 9.5 million (inclusive of legal fees
to lead plaintiff’s counsel).
On April 10, 2023, the court granted preliminary approval to the class settlement. The final settlement approval
hearing was set for October 19, 2023, and on that date the court ordered that, prior to granting final settlement
approval, the lead plaintiffs submit on or before March 29, 2024, an update letter advising the court of the status
of the claims processing.
Note 17 – U.S. patent infringement litigation
Tenaris Coiled Tubes, LLC (“TCT”), a U.S. subsidiary of the Company, was sued in 2017 by its competitor Global
Tubing, alleging defamatory conduct by TCT and seeking a declaration that certain Global Tubing products do not
infringe patents held by TCT. TCT counterclaimed that certain Global Tubing products did infringe patents held by
TCT, and Global Tubing has since sought to invalidate such patents. On December 13, 2019, Global Tubing filed
an amended complaint (including the Company as defendant), alleging, among other things, that TCT and the
Company had misled the patent office. On March 20, 2023, the judge granted summary judgment in favor of
Global Tubing, concluding that the patents at issue are unenforceable due to inequitable conduct during the patent
prosecution process. TCT appealed this judgment, and Global Tubing appealed a previous ruling of the judge. Global
Tubing also filed a brief seeking to recover attorneys’ fees, without specifying the amount of those fees. Although
it is not possible to predict the final outcome of this matter, the Company believes that any potential losses arising
from this case will not be material.
Note 18 – Petrobras-related proceedings and claims
Upon learning that Brazilian, Italian and Swiss authorities were investigating whether certain payments were made
prior to 2014 from accounts of entities presumably associated with affiliates of the Company to accounts allegedly
linked to individuals related to Petróleo Brasileiro S.A. (“Petrobras”) and whether any such payments were intended
to benefit the Company’s Brazilian subsidiary Confab, the Audit Committee of the Company's Board of Directors
engaged external counsel in connection with the Company’s review of these matters. In addition, the Company
voluntarily notified the U.S. Securities and Exchange Commission (“SEC”) and the U.S. Department of Justice
(“DOJ”) in October 2016. The Company conducted, with the assistance of external counsel, an internal investigation
and found no evidence corroborating any involvement by the Company or its directors, officers or employees in
respect of improper payments. An internal investigation commissioned by Petrobras also found no evidence that
Confab obtained any unfair commercial benefit or advantage from Petrobras in return for payments, including
improperly obtained contracts. On June 2, 2022, the Company resolved the investigation by the SEC, and the DOJ
informed that it had closed its parallel inquiry without taking action. Under the settlement with the SEC, the
Company neither admits nor denies the SEC’s findings and on June 24, 2022, paid USD 53.1 million in disgorgement
and prejudgment interest and USD 25 million for a civil penalty to conclude the matter.
222
Annual Accounts – Tenaris S.A.
December 31, 2023 - all amounts in U.S. dollars, unless otherwise stated
In July 2019, the Company learned that the public prosecutors’ office of Milan, Italy, had completed a preliminary
investigation into the same alleged payments and had included in the investigation, among other persons, the
Company’s Chairman and Chief Executive Officer, two other board members, Gianfelice Rocca and Roberto Bonatti,
and the Company’s controlling shareholder, San Faustin. The Company is not a party to the proceedings. On March
22, 2022, upon completion of the evidentiary phase of the trial, the acting prosecutor requested the first-instance
court in Milan in charge of the case to impose sanctions on our Chairman and Chief Executive Officer, on the other
two board members, and on San Faustin. The Company’s outside counsel in Italy advised the Company that neither
the case file nor the prosecutor’s request contain or identify any evidence of involvement in, or knowledge of, the
alleged wrongdoing by any of the three directors. On May 26, 2022, the first-instance court dismissed the case
brought by the public prosecutor against the defendants for lack of jurisdiction and stated that the criminal
proceeding should not have been initiated. On October 7, 2022, the public prosecutor filed an appeal against the
first-instance court’s decision. On February 22, 2024, the court of appeals referred the case to the court of cassation,
which will be in charge of determining whether or not the Italian courts have jurisdiction over the matter.
In June 2020, the Brazilian public prosecutors’ office requested the indictment of several individuals, including three
executives or former executives of Confab and a former agent of Confab, charging them with the alleged crimes
of corruption in relation to contracts executed between 2007 and 2010, and money laundering in relation to
payments between 2009 and 2013. These criminal proceedings are underway. Neither the Company nor Confab is
a party to these criminal proceedings.
In addition, Petrobras and the Brazilian public prosecutors filed civil claims for damages against, among others,
Confab and the Confab executives named in the criminal proceedings referred to above. Confab became aware of
these civil claims in September 2022. As of December 31, 2023, the aggregate amount of these claims was
estimated at BRL322.2 million (or approximately USD 66.6 million). The plaintiffs also seek that Confab be prohibited
from contracting with, or receiving benefits or exemptions from, the Brazilian state for an unspecified term. Confab
believes these claims do not address either the defense arguments or the evidence available to the plaintiffs in Brazil
and presented in other jurisdictions and is vigorously contesting them. At this stage, the Company cannot predict
the outcome of these civil proceedings.
Note 19 – Nationalization of Venezuelan subsidiaries
Following the nationalization by the Venezuelan government of the Company’s interests in its majority-owned
subsidiaries TAVSA - Tubos de Acero de Venezuela S.A. (“Tavsa”) and Matesi Materiales Siderúrgicos S.A (“Matesi”)
and in Complejo Siderúrgico de Guayana, C.A (“Comsigua”), the Company and its wholly-owned subsidiary Talta
- Trading e Marketing Sociedad Unipessoal Lda (“Talta”) initiated arbitration proceedings against Venezuela before
the ICSID in Washington D.C. in connection with these nationalizations and obtained favorable awards, which are
final and not subject to further appeals.
On January 25, 2023, Tenaris and Talta entered into an awards purchase agreement with an unaffiliated purchaser
pursuant to which Tenaris and Talta agreed to sell all of their rights, title and interests in the above-referenced
claims, awards and judgements, including all post-award or post-judgement interest accruing on the awards and
judgements, for a purchase price of USD 81 million, plus a non-refundable signing payment of USD 1 million as
reimbursement of expenses.
After the U.S. Office of Foreign Assets Control approved the transfer of the awards and judgements to the
purchaser, the transfer was consummated on September 7, 2023. As a result, the Company collected USD 82
million in the year ended December 31, 2023. On September 27, 2023, Tenaris and Talta signed a sharing
agreement, pursuant to which Tenaris transferred an amount of USD 40.9 million to Talta. Tenaris and Talta do not
maintain any residual interest in these awards and judgements. The net loss derived from this operation to Tenaris
amounted to USD 7.6 million.
Note 20 – Off balance sheet commitments
The Company issued guarantees covering the funding obligations of Techgen S.A. de C.V. (“Techgen”), an
associated company, under a loan agreement between Techgen and various lenders. As of December 31, 2023 and
2022, the amount guaranteed was approximately USD 10.9 million.
223
Annual Accounts – Tenaris S.A.
December 31, 2023 - all amounts in U.S. dollars, unless otherwise stated
Note 21 – Climate change
The Company carefully assesses the potential impact of climate change and energy transition on its business and
on the risks to its markets and its tangible and intangible assets, and adapts its business strategy accordingly.
In February 2021 Tenaris set a medium-term target to reduce its carbon emissions intensity rate by 30% by 2030,
compared to a 2018 baseline, considering Scopes 1 and 2 emissions plus Scope 3 emissions related to raw materials
and steel purchased from third parties. Tenaris encourages the use of sustainable practices among its suppliers and,
in March 2023, it adopted a Sustainable Sourcing Policy to enhance its efforts in this area. The new Sustainability
Sourcing Policy will help Tenaris to understand better the real emission levels of its suppliers and identify further
opportunities for improvement. Tenaris aims to achieve this target by using a higher proportion of recycled steel
scrap in the metallic mix and by making investments to increase energy efficiency and the use of renewable energy
in its energy requirements.
In particular, a large proportion of these investments are being directed to installing renewable energy capacity for
use in the Tenaris’ operations. In October 2023, following an investment of approximately USD 200 million, Tenaris
put into operation a wind farm in Argentina, which supplies 103.2 MW of power, or close to 50% of its total
electric power requirements, through the interconnected grid, to its industrial facilities in Campana. The wind farm
will reduce Tenaris’s CO2 emissions at the facility by 152,000 tons per year compared to 2018. In November 2023
Tenaris’ Board of Directors approved an investment plan to build a second wind farm in Argentina at a cost of
approximately USD 214 million, which would supply a further 30% of the current energy requirements of its facilities
in Campana, and reduce Tenaris’s CO2 emissions by a further 102,500 tons per year. The medium-term target forms
part of a broader objective of decarbonizing our operations and reaching carbon neutrality. At the same time,
Tenaris is increasing its sales for low-carbon energy applications, such as hydrogen, geothermal and carbon capture
and storage. These sales currently account for a relatively small proportion of overall sales but are expected to grow
in the coming years.
In its assessment, Tenaris also considers that the countries in which it operates and its customers are also establishing
their own decarbonization strategies and objectives, and that some customers are requesting specific information
from their suppliers, including Tenaris, concerning the carbon emissions and Environmental, Social and Governance
(“ESG”) practices in their supply chain, and that they may adjust their supply practices in light of that information.
The recoverable value assessments performed by the Company for purposes of the preparation of these financial
statements reflects management’s views on energy transition and climate change and their potential medium- and
long-term impact on the Company’s operations. In addition, the Company carefully monitors the medium- and
long-term outlook scenarios published by leading industry experts on how the energy transition could affect global
demand for energy and oil and gas and how this could affect the global demand for tubular products and its sales.
Furthermore, estimates and assumptions used in the Company’s valuations are based on available information and
current government regulations on energy transition and climate-related matters, as well as on the Company´s
current short-term investment plans. As of the date of these financial statements, the Company does not believe
that climate-related matters should trigger any material adjustments.
Note 22 – Share buyback program
On November 1, 2023, the Company’s Board of Directors approved a share buyback program of up to USD 1.2
billion (which, at the closing price of November 1, 2023 on the Milan Stock Exchange, would represent
approximately 75.4 million shares, or 6.4% of the outstanding shares), to be executed within a year, with the
intention to cancel the ordinary shares acquired through the program.
The buyback program is being carried out under the authority granted by the annual general meeting of
shareholders held on June 2, 2020, which may be renewed or extended, up to a maximum of 10% of the
Company’s shares. The buybacks may be ceased, paused and continued at any time, subject to compliance with
applicable laws and regulations.
The program is divided into tranches. For purposes of carrying out the buyback program, Tenaris entered into a
non-discretionary buyback agreement with a primary financial institution that makes trading decisions concerning
the timing of the purchases of Tenaris’s ordinary shares independently of and uninfluenced by Tenaris and must act
in compliance with applicable rules and regulations, including the Market Abuse Regulation 596/2014 and the
Commission Delegated Regulation (EU) 2016/1052. Under the buyback agreement, purchases of shares may
continue during any blackout periods.
224
Annual Accounts – Tenaris S.A.
December 31, 2023 - all amounts in U.S. dollars, unless otherwise stated
During 2023, the Company purchased 12,648,091 shares, for a value of USD 213.7 million. As of December 31,
2023, the remaining amount to be purchased under the first tranche amounted to approximately USD 86.2. On
January 12, 2024, the first tranche of the Share Buyback Program was completed.
Note 23 – Events after the reporting period
Annual Dividend Proposal
On February 21, 2024, the Company’s Board of Directors proposed, for the approval of the Annual General
Shareholders' meeting to be held on April 30, 2024, the payment of an annual dividend of USD 0.60 per share
(USD 1.20 per ADS), or approximately USD 700 million, which includes the interim dividend of USD 0.20 per ordinary
shares, excluding own shares, (USD 0.40 per ADS) or approximately USD 235 million, paid on November 22, 2023.
If the annual dividend is approved by the shareholders, a dividend of USD 0.40 per share (USD 0.80 per ADS), or
approximately USD 465 million will be paid on May 22, 2024, with an ex-dividend date of May 20, 2024. These
annual accounts do not reflect this dividend payable.
Share buyback Second Tranche
On February 25, 2024, the Company announced the second tranche of its Share Buyback Program that began on
February 26, 2024 and end no later than May 24, 2024. Ordinary shares purchased under the Program will be
cancelled in due course.
Further information on the buyback transactions is available on Tenaris’ corporate website under the Share Buyback
Program Section.
Alicia Móndolo
Chief Financial Officer
225
Annual Report 2023
EXHIBITS
Principal subsidiaries
Exhibit 1
We conduct all our operations through subsidiaries. The following table shows the principal subsidiaries of the
Company and its direct and indirect ownership in each subsidiary as of December 31, 2023, 2022 and 2021.
Company
Country of
Incorporation
Main activity
ALGOMA TUBES INC.
BREDERO SHAW INTERNATIONAL B.V. and
subsidiaries
CONFAB INDUSTRIAL S.A. and subsidiaries
DALMINE S.p.A. and subsidiaries
Canada
Netherlands
Brazil
Italy
EXIROS B.V. and subsidiaries (a)
Netherlands
HYDRIL COMPANY and subsidiaries
MAVERICK TUBE CORPORATION and
subsidiaries
USA
USA
P.T. SEAMLESS PIPE INDONESIA JAYA
Indonesia
S.C. SILCOTUB S.A.
Romania
Manufacturing of welded and seamless
steel pipes
Holding company and supplier of pipe
coating services
Manufacturing of welded steel pipes
Percentage of ownership at
December 31, (*)
2023
2022
2021
100%
100%
100%
100%
NA
NA
100%
100%
100%
Manufacturing of seamless steel pipes
100%
100%
100%
Procurement and trading services
Manufacture and marketing of premium
connections
Manufacturing of welded and seamless
steel pipes
Manufacturing of seamless steel
products
Manufacturing of seamless steel pipes
50%
50%
50%
100%
100%
100%
100%
100%
100%
89%
89%
89%
100%
100%
100%
SAUDI STEEL PIPE CO. and subsidiaries (b)
Saudi Arabia
Manufacturing of welded steel pipes
48%
48%
48%
SIAT SOCIEDAD ANONIMA
SIDERCA SOCIEDAD ANONIMA INDUSTRIAL
Y COMERCIAL and subsidiaries (c)
TALTA - TRADING E MARKETING
SOCIEDADE UNIPESSOAL LDA.
Argentina
Manufacturing of welded steel pipes
100%
100%
100%
Argentina
Manufacturing of seamless steel pipes
100%
100%
100%
Portugal
Holding company
100%
100%
100%
TENARIS BAY CITY, INC.
USA
TENARIS CONNECTIONS BV
Netherlands
TENARIS FINANCIAL SERVICES S.A.
TENARIS GLOBAL SERVICES (CANADA) INC.
TENARIS GLOBAL SERVICES (U.S.A.)
CORPORATION
Uruguay
Canada
USA
TENARIS GLOBAL SERVICES (UK) LTD
United Kingdom
TENARIS GLOBAL SERVICES S.A. and
subsidiaries
TENARIS INVESTMENTS (NL) B.V. and
subsidiaries
TENARIS GLOBAL SERVICES and
INVESTMENTS S.àr.l. and subsidiaries
Uruguay
Manufacturing of welded and seamless
steel pipes
Development, management and
licensing of intellectual property
Financial company
100%
100%
100%
100%
100%
100%
100%
100%
100%
Marketing of steel products
100%
100%
100%
Marketing of steel products
100%
100%
100%
Holding company and marketing of
steel products
Holding company, marketing and
distribution of steel products
100%
100%
100%
100%
100%
100%
Netherlands
Holding company
100%
100%
100%
Luxembourg
Holding company
100%
100%
100%
TENARIS QINGDAO STEEL PIPES LTD.
China
TENARIS TUBOCARIBE LTDA.
Colombia
Processing of premium joints, couplings
and automotive components
Manufacturing of welded and seamless
steel pipes
100%
100%
100%
100%
100%
100%
TUBOS DE ACERO DE MEXICO, S.A. and
subsidiaries
Mexico
Manufacturing of seamless steel pipes
100%
100%
100%
(*) All percentages rounded.
Tenaris holds 40% of Tubular Technical Services Ltd. and Pipe Coaters Nigeria Ltd., 49% of Tubulars Finishing Nigeria Limited, 49%
of Amaja Tubular Services Limited, 60% of Tenaris Baogang Baotou Steel Pipes Ltd. Until 2022 held 98.4% of Tenaris Supply Chain
S.A. and, until 2021 held 49% of Tubular Services Angola Lda. after which years it started holding 100% of each of both companies.
(a) Tenaris holds 50% of the voting rights. The Company recognizes the assets, liabilities, revenue and expenses in relation to its
interest in the joint operation.
(b) Saudi Steel Pipe Co. is a public company listed in the Saudi Arabian Stock Exchange (Tadāwul), Tenaris holds 47.79% and has the
right to nominate the majority of the votes of the board of directors, therefore Tenaris has control over SSPC. Since May, 2023, Saudi
Steel Pipe Co. holds 57.3% of Global Pipe Company, therefore Tenaris has control over GPC.
(c) Until its liquidation in April 2023 Siderca held 51% of NKKTubes.
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Annual Report 2023
Ratios
Liquid financial assets over total assets
Thousands of U.S. dollars
2023
At December 31,
2022
Cash and cash equivalents
Other current investments
Non-current investments
Liquid financial assets
Total assets
Ratio
Total liabilities to total assets ratio
1,637,821
1,969,631
398,220
4,005,672
21,081,895
0.19
1,091,527
438,448
113,574
1,643,549
17,550,246
0.09
Exhibit 2
2021
318,127
397,849
312,619
1,028,595
14,449,431
0.07
Thousands of U.S. dollars
2023
At December 31,
2022
2021
Total liabilities
Total assets
Ratio
4,051,458
21,081,895
0.19
3,515,809
17,550,246
0.20
2,343,729
14,449,431
0.16
Current borrowings to total borrowings
Thousands of U.S. dollars
2023
At December 31,
2022
2021
Current borrowings
Total borrowings
Ratio
535,133
583,437
0.92
682,329
728,762
0.94
219,501
330,933
0.66
227
Annual Report 2023
Alternative performance measures
EBITDA, Earnings before interest, tax, depreciation and amortization
Exhibit 3
EBITDA provides an analysis of the operating results excluding depreciation and amortization and impairments, as
they are 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 charge +/- Equity in Earnings (losses) of non-consolidated
companies +/- Financial results + Depreciation and amortization +/- Impairment charge/(reversal)
EBITDA is a non-IFRS alternative performance measure.
Millions of U.S. dollars
Net income
Income tax charge
Equity in earnings of non-consolidated companies
Financial results
Depreciation and amortization
Impairment charge
EBITDA
Net cash / (debt) position
For the year ended December 31,
2022
2021
2023
3,958
675
(95)
(221)
549
-
4,865
2,549
617
(209)
6
608
77
3,648
1,053
189
(513)
(23)
595
57
1,359
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 is a non-IFRS alternative performance measure.
Millions of U.S. dollars
Cash and cash equivalents
Other current investments
Non-current investments
Derivatives hedging borrowings and investments
Current borrowings
Non-current borrowings
Net cash position
2023
At December 31,
2022
2021
1,638
1,970
398
-
(535)
(48)
3,422
1,092
438
114
6
(682)
(46)
921
318
398
313
2
(220)
(111)
700
228
Annual Report 2023
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. Net cash provided by operating activities for the
year 2023 amounted to $4,395 million.
Millions of U.S. dollars
Net cash provided by operating activities
Capital expenditures
Free cash flow
For the year ended December 31,
2022
2021
2023
4,395
(619)
3,776
1,167
(378)
789
119
(240)
(120)
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Annual Report 2023
MANAGEMENT CERTIFICATION
We confirm, to the best of our knowledge, that:
1.
2.
3.
the consolidated financial statements prepared in conformity with International Financial Reporting
Standards (“IFRS”), as issued by the International Accounting Standards Board and in accordance with IFRS
as adopted by the European Union, included in this annual report, give a true and fair view of the assets,
liabilities, financial position and profit or loss of Tenaris S.A. and its consolidated subsidiaries, taken as a
whole;
the annual accounts prepared in accordance with Luxembourg legal and regulatory requirements, included
in this annual report, give a true and fair view of the assets, liabilities, financial position and profit or loss of
Tenaris S.A.; and
the consolidated management report on the consolidated financial statements included in this annual
report, which has been combined with the management report on the annual accounts included in this
annual report, gives a fair review of the development and performance of the business and the position of
Tenaris S.A., or Tenaris S.A. and its consolidated subsidiaries, taken as a whole, as applicable, together
with a description of the principal risks and uncertainties they face.
Chief Executive Officer
Paolo Rocca
March 22, 2024
Chief Financial Officer
Alicia Móndolo
March 22, 2024
230